UTAH CLAY TECHNOLOGY INC
424B3, 2001-01-19
MINING & QUARRYING OF NONMETALLIC MINERALS (NO FUELS)
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                                                            Reg. 230.424(b)(3)
                                                            File No. 333-34308
                                                                    PROSPECTUS

                            UTAH CLAY TECHNOLOGY, INC.

                         590,000 Shares of Common Stock

        590,000 shares of common stock are being offered by three selling
security holders, Dennis S. Engh, James Groscost and the law firm of
McKay, Burton and Thurman, all of Salt Lake City, Utah.  None of the proceeds
of sale will go to the company.  All proceeds will go to the selling security
holders and for the payment of their brokerage commissions.  Mr. Engh is the
chief executive officer and a director of Utah Clay Technology.


                          --------------------------

          Our common stock trades in the "Pink Sheets."  Its trading symbol is
"UTCL".

                          --------------------------


The purchase of these shares involves       Neither the Securities and Exchange
a high degree of risk.  See                 Commission nor any state securities
"Risk Factors," beginning on page 1.        commission has approved or
                                            disapproved these securities or
                                            determined if this offering
                                            memorandum is truthful or complete.
                                            Any representation to the contrary
                                            is a criminal offense.

                           Utah Clay Technology, Inc.
                              3985 South 2000 East
                           Salt Lake City, UT   84124
                             Telephone 801-424-0223
                                 January 17, 2001

<PAGE>

                               TABLE OF CONTENTS


                                                                       Page

Summary ..............................................................  1
        Our Company ..................................................  1

Risk Factors .........................................................  1
        No commercially viable deposits of kaolin
                have been found.  We may never have
                revenues, in which event we will have
                to stop all operations.  .............................  1
        We require, but do not have, the funds
                needed to conduct an exploration
                program that would determine whether
                our properties do or do not contain
                reserves of kaolin. If we do not obtain
                these funds, we may have to shut down
                all operations.  .....................................  2
        We may lose the mining leases and mining
                claims we own or have the right to
                acquire if we fail to make required,
                annual, rental payments.  If we do not
                obtain the necessary funds, we will lose
                the leases and mining claims.  .......................  2
        The market for our common stock is poorly
                developed.  Purchasers of our securities
                should anticipate a thin and
                volatile market. Investors that purchase
                our common stock may not be able to sell
                their securities.  ...................................  2

Use of Proceeds ......................................................  2

Determination of Offering Prices .....................................  2

The Selling Security Holders .........................................  2

Plan of Distribution .................................................  3

Legal Proceedings ....................................................  4

Directors, Executive Officers, Promoters and
        Control Persons ..............................................  5
        Significant Consultants and Other Personnel ..................  6

Securities Ownership of Certain Beneficial
        Owners and Management ........................................  8

Description of Securities ............................................  8
        Common Stock .................................................  8
                Voting Rights ........................................  8
                Dividend Rights ......................................  9
                Liquidation Rights ...................................  9
                Preemptive Rights ....................................  9
                Registrar and Transfer Agent .........................  9
                Dissenters' Rights ...................................  9

                                     ii
<PAGE>

        Preferred Stock ..............................................  9
        Series A Preferred Stock .....................................  9

Interest of Named Experts and Counsel ................................  10

Indemnification ......................................................  10

Description of Business ..............................................  11
        Business Development .........................................  11
        Kaolin  ......................................................  12
        The Market for Kaolin ........................................  12
        Results of Tests on the Utah Clay Deposits ...................  12
        Competition ..................................................  13
        Distribution Methods .........................................  13
        Patents ......................................................  13
        Government Approval of Principal Products ....................  13
        Government Regulations  ......................................  13
        Costs and Effects of Complying with
                Environmental Laws ...................................  14
        Employees ....................................................  14
        Working Capital Requirements .................................  14
        Product Research and Development During
                the Next Twelve Months ...............................  14
        Additional Employees .........................................  15

Description of Property ..............................................  15
        Location and Means of Access to the
                Properties ...........................................  15
        Description of Our Title .....................................  16
        History of Mineral Exploration ...............................  21
        Plant and Equipment ..........................................  22
        Plan of Operations for the Next Twelve Months ................  23
        Rock Formations and Mineralizations ..........................  24
        Geology ......................................................  25

Certain Relationships and Related Transactions .......................  26

Market for Common Equity and Related
        Stockholder Matters ..........................................  27
        Holders ......................................................  28
        Dividends ....................................................  28

Penny Stock Regulations ..............................................  28
        The Penny Stock Suitability Rule .............................  29
        The Penny Stock Disclosure Rule ..............................  30
        Effects of the Rule ..........................................  30
        Potential De-Listing of Common Stock .........................  30
        Reports to Security Holders ..................................  30

Executive Compensation ...............................................  31
        Stock Options ................................................  31
        Directors ....................................................  31
        Employment Contracts .........................................  31

Changes in and Disagreements With Accountants on
        Accounting and Financial Disclosure ..........................  32

                                     iii
<PAGE>

Additional Information ...............................................  32

Financial Statements .................................................  32

<PAGE>
                                   SUMMARY

        Our Company.  Our company, Utah Clay Technology, Inc., is an
exploration-stage corporation organized to explore, define and test kaolin clay
from our White Mountain and Oro Blanco leases and three other properties under
option to lease to us.  Subject to our obtaining the necessary funds, we
propose to continue to explore our properties and to develop our properties
if the exploration and tests should indicate that development is warranted.
All properties are in the State of Utah.

        There is no assurance that there is a commercially viable mineral
deposit on any of the properties. Laboratory tests conducted by independent
laboratories have determined that our properties, to some extent, contain a
mineral composition of hydrothermal kaolin that has met industry standards
for fillers in paint. We must conduct further exploration before we can make a
final evaluation as to the economic and legal feasibility of developing our
properties.

        Plan of Distribution.  The selling security holders will offer the
590,000 shares from time to time in the over-the-counter market through brokers
at prevailing, fluctuating market prices.  The brokers will receive no more
than ordinary and customary commissions.


                                RISK FACTORS
                               --------------

        The following principal factors make the offering described herein
speculative and one of high risk.  An investment in the shares should not be
made by persons who cannot afford the loss of their entire investment.

        No commercially viable deposits of kaolin have been found.  We may
never have revenues, in which event we will have to stop all operations.

                The efforts of our founders and then of our company after its
incorporation in 1994 have been to locate the principal kaolin deposits in
Utah, place them under lease, and conduct exploratory drilling for property
appraisal purposes.

                Our limited exploratory drilling to date has outlined a
potential product slate of small particle size calcined and uncalcined clays.
Calcined clays are clays that have been heated to such a high temperature that
the clays' molecular structure has been modified. The extracted minerals have
been tested both in the laboratory and with commercial buyers, but our limited
exploratory drilling has been insufficient in scope to outline commercially
viable reserves.

                Since we have no reserves, we cannot estimate how long we will
be able to provide marketable kaolin from our properties.  We may never have
revenues, in which event we will have to stop all operations.

                                       1
<PAGE>

        We require, but do not have, the funds needed to conduct an
exploration program that would determine whether our properties do or do not
contain reserves of kaolin.  If we do not obtain these funds, we may have to
shut down all operations.

                A proper drilling and testing program on our Oro Blanco and
White Mountain leases will cost approximately $500,000.  We lack this capital
and have not identified a source for this capital need.

                We have options to acquire three other properties that are
owned by the persons that manage our company.  The exercise prices of these
three options have not been set but are to be the fair market values of the
properties as determined by an independent engineer.  We do not have the funds
needed to conduct a proper drilling and testing program on these three,
optioned properties and have not identified a source for this capital need.  If
we do not obtain these funds, we may have to shut down all operations.

        We may lose the mining leases and mining claims we own or have the
right to acquire if we fail to make required, annual, rental payments.  If we
do not obtain the necessary funds, we will lose the leases and mining claims.

                We are required to make annual payments of approximately
$50,000 to retain the mining leases and claims we own or have an option to
acquire.  We do not have these funds on hand, and we have not identified a
source for these funds for the next annual payments.  If we do not obtain the
necessary funds, we will lose the leases and mining claims.

        The market for our common stock is poorly developed.  Purchasers of
our securities should anticipate a thin and volatile market.  Investors that
purchase our common stock may not be able to sell their securities.

                There are many days when our common stock does not trade at
all in the over-the-counter market.  The spread between the quoted bid and ask
prices is usually great.  The stock has never traded above $5, the price
required to remove certain trading requirements imposed on Bulletin Board
"penny stocks."  Until these trading requirements are removed, many brokerage
firms will not allow their brokers to recommend our stock for purchase by
their customers.  Investors that purchase our common stock may not be able to
sell their securities.

                               USE OF PROCEEDS

        All proceeds from the sale of the 590,000 shares of common stock will
go to the selling security holders for their own personal use after the payment
of any brokerage commissions.

                      DETERMINATION OF OFFERING PRICES

        Each of the selling security holders proposes to sell his shares
primarily through broker-dealers at prevailing market prices. They may also
offer the securities in private transactions at negotiated prices.

                        THE SELLING SECURITY HOLDERS

        There are three selling security holders: Dennis S. Engh, 500,000
shares; James Groscost, 10,000 shares; and the law firm of McKay,
Burton and Thurman, 80,000 shares.

                                        2
<PAGE>

        Dennis S. Engh has been a director and the chief executive officer of
Utah Clay Technology since its organization in 1994.  All of the company's
mining leases and options to acquire mining leases were acquired from entities
under the direct control and partial ownership of Mr. Engh and other members
of his family.

        James Groscost is the owner of a trucking company in the Salt Lake
City, Utah area.  He is not affiliated with Utah Clay.

        McKay, Burton and Thurman is a Salt Lake City, Utah law firm that has
represented Utah Clay in many matters over the past several years.  It is not
affiliated with Utah Clay.  The beneficial owner of the law firm's shares is
one person, William H. Thurman.

        The selling security holders' ownership of the company's common stock,
both before and after the offering, is as follows:

                                                              Percent
       Selling Security Holder          Amount               of Total
      =========================        ========             ===========

      Dennis S. Engh:
      ----------------

         Owns now                      4,641,197               19.89

         Owned after sale of
         500,000 shares                4,141,197               17.75


      James Groscost:
      -----------------

          Owns now                      10,000                 0.04

          Owned after sale of
          10,000 shares                    0                     0


      McKay, Burton & Thurman:
      --------------------------

          Owns now                       80,000                 0.34

          Owned after sale of
          80,000 shares                    0                     0


                                PLAN OF DISTRIBUTION

        Each of the selling security holders may effect sales from time to time
in transactions in the over-the-counter market at market prices prevailing at
the time of sale.

        Each of the selling security holders may effect such transactions by
selling the securities only through broker-dealers acting as agents.  Such
broker-dealers may receive commissions from the selling security holders only
at rates that are not in excess of customary commissions.

                                         3
<PAGE>

        The selling security holders and broker-dealers acting in
connection with any such sale might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act.

        With respect to the plan of distribution for the sale by the selling
security holders as stated above,

        o       to the extent that the securities are sold at a price other
                than the prevailing market price, such price would need to be
                set forth in this prospectus;  and

        o       if the compensation paid to broker-dealers is other than usual
                and customary discounts, concessions or commissions, disclosure
                of the terms of the transaction in this prospectus would be
                required.

        We have been advised that the selling security holders understand the
prospectus delivery requirements for sales made pursuant to this prospectus
and that, if there are changes to the stated plan of distribution or if
additional information as noted above is needed, a post-effective amendment
with current information would need to be filed before offers are made and
no sales could occur until such amendment is declared effective.

        As long as any selling security holder offers for sale the Utah Clay
Technology stock covered by this Prospectus, he is subject to the provisions
of Regulation M of the Securities and Exchange Commission.  Regulation M,
among other provisions, makes it unlawful for a selling security holder or any
person affiliated with him -

        o       to buy Utah Clay Technology common stock,

        o       to bid for Utah Clay Technology common stock, or

        o       to attempt to induce any person to buy or bid for Utah Clay
                Technology common stock, other than the shares of the selling
                security holders covered by this Prospectus.

Further, any broker or dealer that participates in the sale of a selling
security holder's stock covered by this Prospectus is also subject to
applicable provisions of Regulation M, including those detailed above that
apply to a selling security holder.

                              LEGAL PROCEEDINGS

        Neither Utah Clay Technology nor any of its property is a party to or
the subject of a pending legal proceeding.

        We are unaware of any proceeding that a governmental authority is
contemplating that would involve us or any of our property.

                                       4
<PAGE>

        We are unaware of any material proceeding to which any director,
officer or affiliate of the company, any owner of record or beneficially of
more than five percent of any class of voting securities of the company, or
security holder is a party adverse to the company or has a material interest
adverse to the company.

          DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

        A list of the current officers, directors and significant consultants
appears below.  The directors of the company are elected annually by the
shareholders.  The officers serve at the pleasure of the board of directors.
The directors do not receive fees or other remuneration for their services.

                                                                Position Held
           Person                          Office                       Since
  --------------------------    --------------------------        ------------
  Dennis S. Engh, 60            President and Director                  1994

  Thomas F. Harrison, 49        Vice President and Director             1994

  Daniel H. Engh, 49            Vice President and Director             1994

  Darin D. Engh, 29             Secretary, Treasurer and Director       1994

  Carmen J. (Tony) Lotito, 55   Director of Marketing and Director      1994

  Robert F. Conley, Ph.D., 65   Consultant                              1994


        Daniel H. Engh, listed in the above table, is the brother of
Dennis S. Engh.  Darin D. Engh is the son of Dennis S. Engh and the nephew of
Daniel H. Engh.

        Dennis S. Engh.  Mr. Engh studied botanical science and business at
the University of Utah.  After college he became the manager for Engh Floral
Corporation, a family-owned business, advancing to president over a ten-year
period.  In 1981 he became president of Dienco Oil Development, Inc., an oil
well development company later purchased by a company in Texas.  In 1986 he
became president of The Clothes Link, a seven-store women's clothing store
system in Utah.  From 1985 to 1990 he also supervised all land acquisition for
industrial minerals for Pioneer Minerals, Inc., a Utah corporation.  He then
became president of that company.  During that same period he also organized
and operated a landscape and grounds maintenance business which performed
contract work in Utah, Idaho and Nevada. He organized Utah Clay Technology in
1994 and has served as its president since its organization.

        Thomas F. Harrison.  Mr. Harrison received a bachelor of science
degree in biology in 1972 and a master's of business administration degree
from the University of Utah in 1988.  He was a microfilming supervisor for
Mineral Records, Inc. from 1976 to 1979.  He served as the executive vice
president and the director of program development for CompHealth, Inc. from

                                      5
<PAGE>

1980 to 1992.  In this capacity he supervised the operations of 200 persons
in three offices.  There were approximately 300 physicians working for the
company at any one time.  Since 1995 Mr. Harrison has been president of
Buffalo Energy Corp., which develops energy projects for Indian Nations.

        Daniel H. Engh.  Mr. Engh received a bachelor of science degree in
accounting from the University of Utah in 1973.  Upon graduation he joined
the Engh Floral Corporation where he managed the accounts, payroll,
receivables and handled tax matters.  He trained personnel in numerous phases
of accounting and supervised a staff of 130 persons in this $3 million-a-year
business.  In 1984 he became controller and buyer for Della's Flower & Gifts,
Inc.  He than joined the staff of The Clothes Link where he was responsible
for lease negotiations, personnel and overseeing various store operations.  In
1988 he became the secretary and treasurer for Pioneer Minerals, Inc. and was
in charge of all accounting costs, controls, lease procurement and title
operations.  Since the formation of that organization Mr. Engh has been
active in the field work, exploration and assessment of industrial minerals in
the State of Utah.  Mr. Engh has served since 1985 as a tax audit manager for
the Utah Tax Commission.

        Darin D. Engh.  Darin D. Engh is President of Engh Flowers, Inc., a
retail and wholesale garden center and nursery stock outlet which was
organized in 1990, expanded to four locations along the Wasach Front of Utah,
has 40 employees, and has gross annual sales today of approximately $1
million.  Mr. Engh has received a bachelor of science in political geography
at the University of Utah.

        Carmen J. (Tony) Lotito.  Mr. Lotito received a bachelor of science
degree in accounting in 1967 from the University of Southern California.  He
joined the accounting firm of Pannell, Kerr, Forester & Co. as the senior
accountant in charge of management and audit services for that company's
San Diego, California office.  In 1974 he formed his own management and
financial services organization.  In this respect, he provides direct
management assistance and consulting financial services to oil and gas
industry clients, retail operations, and food manufacturing and distribution
companies.  In 1988 he joined ConAgra, Inc. in San Antonio, Texas where he
oversaw research and development, sales and marketing of specialty products
under development.  In 1994 he joined Utah Clay Technology and has served and
still serves as its director of marketing.

Significant Consultants and Other Personnel.
--------------------------------------------

        Robert F. Conley, Ph.D..  Dr. Conley acts as a consultant to the
company.  He received a bachelor of science degree in chemistry, a masters of
science degree in electro-chemistry and a doctor of philosophy degree in
inorganic chemistry and mineralogy, all from Indiana University.  He was

                                     6
<PAGE>

employed for four years at the Indiana Geological Survey in evaluating
industrial minerals and development technologies.  Then, he joined the
Georgia Kaolin Company and was in charge of research into high technology
processes, electrochemical studies, and research into a variety of new
products.  At the request of the Engineering Conference, he developed a series
of lectures on the mechanics and chemistry of delamination grinding.  He
continues to give annual seminars in the U.S. and in Europe on this topic.

        In 1974 Dr. Conley formed Mineral and Resource Technology with three
other scientists to perform contract research on minerals and to develop new
products, especially pigments.  He is the author of approximately 30 patents
on mineral and specialty material systems, their process of generation and
separation.  He is the coauthor of two books on industrial fine grinding and
chemical treatment of mineral systems for Polymer Corporation.

        In 1977 Dr. Conley developed the electric process for producing ultra
high purity solder now used by most electronic circuit board manufacturers in
the U.S.  From 1978 through 1981 Dr. Conley worked under contract by the
Federal Power Commission in Mexico to design a system and to work with the
mineral reserves in Mexico to produce alumina and aluminum metal from
low-grade mexican ores.  Dr. Conley is active in the general area of high
technology and has been an annual guest lecturer for 15 years for the
chemistry department at Kent State University on mineral pigment development,
dispersion techniques and other aspects of pigment processing for the paint,
plastics and polymer industries.

        No executive officer, director, person nominated to become a director,
promoter or control person of our company has been involved in legal
proceedings during the last five years such as

        o       bankruptcy,

        o       criminal proceedings (excluding traffic violations and other
                minor offenses), or

        o       proceedings permanently or temporarily enjoining, barring,
                suspending or otherwise limiting his involvement in any type
                of business, securities or banking activities.

        o       Nor has any such person been found by a court of competent
                jurisdiction in a civil action, or the Securities and Exchange
                Commission or the Commodity Futures Trading Commission to have
                violated a federal or state securities or commodities law.

                                      7
<PAGE>

            SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                             AND MANAGEMENT

        The table below sets forth the beneficial ownership of securities of
the company by the officers and directors, individually, and as a group, and
each person who is known to the company to be the beneficial owner of more
than five percent of any class of the company's voting securities:

<TABLE>
<CAPTION>

                                                                   Shares of
                                          Shares of                Series A
                                          Common Stock  Percent    Preferred Stock  Percent
                                          ------------  -------    ---------------  -------

<S>                                       <C>           <C>        <C>              <C>
Dennis S. Engh                               4,641,197     19.8             27,180     32.0
Thomas F. Harrison                           4,555,592     19.5             51,037     60.2
Daniel H. Engh                               4,786,307     20.4                 --       --
Carmen J. (Tony) Lotito                      2,447,492     10.4              6,600      7.8
Darin D. Engh                                  100,000      0.4                 --       --
Robert and Jeannette Nelson                  1,312,500      5.6                 --       --
Officers and Directors as a group (5
persons)                                    16,530,588     70.6             84,817    100.0

</TABLE>

        Jeannette Nelson, listed in the above table, is the sister of
Dennis S. Engh, and Daniel H. Engh and the aunt of Darin D. Engh.

        There are no arrangements which may result in a change in control of
the company.

                            DESCRIPTION OF SECURITIES

        The company is authorized to issue 30 million shares of common stock,
$0.001 par value, and 10 million shares of preferred stock, $0.001 par value.
The presently outstanding 23,421,874 shares of common stock and 84,817 shares
of preferred stock are fully paid and nonassessable.

Common Stock
-------------

        Voting Rights.  Holders of shares of common stock are entitled to one
vote a share on all matters submitted to a vote of the shareholders.  Shares
of common stock do not have cumulative voting rights, which means that the
holders of a majority of the shareholder votes eligible to vote and voting
for the election of the board of directors can elect all members of the board
of directors.

                                       8
<PAGE>

        Dividend Rights.  Holders of record of shares of common stock are
entitled to receive dividends when and if declared by the board of directors
out of funds of the company legally available therefor.

        Liquidation Rights.  Upon any liquidation, dissolution or winding up
of the company, holders of shares of common stock are entitled to receive pro
rata all of the assets of the company available for distribution to
shareholders after distributions are made to the holders of the company's
preferred stock.

        Preemptive Rights.  Holders of common stock do not have any
preemptive rights to subscribe for or to purchase any stock, obligations or
other securities of the company.

        Registrar and Transfer Agent.  The company's registrar and transfer
agent is Interwest Transfer Company, Inc., 1981 East Murray Holladay Road,
Suite 100, Salt Lake City, Utah 84117.

        Dissenters' Rights.  Under current Utah law, a shareholder is afforded
dissenters' rights which, if properly exercised, may require the company to
purchase his shares.  Dissenters' rights commonly arise in extraordinary
transactions such as

        o       mergers,

        o       consolidations,

        o       reorganizations,

        o       substantial asset sales,

        o       liquidating distributions, and

        o       certain amendments to the company's certificate of
                incorporation.

Preferred Stock
----------------

        The company is also authorized to issue 10 million shares of
preferred stock, $0.001 par value.

        The preferred stock or any series of preferred stock has no qualities
or preferences over the common stock until the board of directors acts.
The board can designate discreet series of the preferred stock.  By board
resolution it can carve out a series of preferred stock with specific
qualities or preferences.

Series A Preferred Stock
-------------------------

        We have issued 84,817 shares of Series A Preferred Stock at $5.00 a
share for a total of $424,085, which stock -

                                         9
<PAGE>

        o       is entitled to annual dividends of $0.50 a share payable only
                from earnings of the company and cumulative if payable but
                missed,

        o       is non-voting,

        o       does not carry preemption rights and

        o       is preferred over the company's common stock in the event of
                the liquidation and dissolution of the company.

        The Series A Preferred Stock is neither convertible into Common Stock
nor redeemable at the option of the holder.  It is redeemable at the option
of the company.

        There are no provisions in the company's charter or bylaws that would
delay, defer or prevent a change in control of the company.

                    INTEREST OF NAMED EXPERTS AND COUNSEL

        Thomas J. Kenan is named in the registration statement of which this
prospectus is a part as having given an opinion on the validity of the
offered securities.  His spouse, Marilyn C. Kenan, is the trustee and sole
beneficiary of the Marilyn C. Kenan Trust, which is the record owner of
764,194 shares of common stock of the company.  Mr. Kenan disavows any
beneficial interest in the shares owned of record by such trust.

                              INDEMNIFICATION

        Under Utah corporation law, a corporation is authorized to indemnify
officers, directors, employees and agents who are parties or threatened to be
made parties to any civil, criminal, administrative or investigative suit or
proceeding by reason of the fact that they are or were a director, officer,
employee or agent of the corporation or are or were acting in the same
capacity for another entity at the request of the corporation.  Such
indemnification includes reasonable expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement if they acted in good faith
and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation.

        With respect to any criminal action or proceeding, these same
indemnification authorizations apply if these persons had no reasonable cause
to believe their conduct was unlawful.

        In the case of any action by the corporation against such persons,
the corporation is authorized to provide similar indemnification.  But, if any
such persons should be adjudged to be liable for negligence or misconduct in
the performance of duties to the corporation, the court conducting the

                                       10
<PAGE>

proceeding must determine that such persons are nevertheless fairly and
reasonably entitled to indemnification.

        To the extent any such persons are successful on the merits in defense
of any such action, suit or proceeding, Utah law provides that they shall be
indemnified against reasonable expenses, including attorney fees.  A
corporation is authorized to advance anticipated expenses for such suits or
proceedings upon an undertaking by the person to whom such advance is made to
repay such advances if it is ultimately determined that such person is not
entitled to be indemnified by the corporation.

        Indemnification and payment of expenses provided by Utah law are not
deemed exclusive of any other rights by which an officer, director, employee
or agent may seek indemnification or payment of expenses or may be entitled to
under any bylaw, agreement, or vote of stockholders or disinterested
directors.  In such regard, a Utah corporation  behalf of any person who is or
was a director, officer, employee or agent of the corporation.

        As a result of such corporation law, Utah Clay may, at some future
time, be legally obligated to pay judgments (including amounts paid in
settlement) and expenses in regard to civil or criminal suits or proceedings
brought against one or more of its officers, directors, employees or agents,
as such.

        Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the company pursuant to the foregoing provisions or otherwise, the
company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable.

                         DESCRIPTION OF BUSINESS

Business Development

        Utah Clay Technology, Inc. was incorporated on March 1, 1994 in the
State of Utah.  Since our organization we have been engaged in the process of -

        o       locating kaolin deposits in Utah,

        o       obtaining the legal rights to these deposits,

        o       conducting exploratory operations,

        o       testing the extracted minerals in the laboratory, and

        o       selling samples of the processed form of our kaolin to a
                commercial company for market evaluation.

                                        11
<PAGE>

        We have financed these activities by the sale of capital stock for
money, advances by shareholders and by the exchange of capital stock for
services rendered to our company.

        Utah Clay is held together by the day-to-day services of
Dennis S. Engh, our chief executive officer, and Thomas F. Harrison, a vice
president and chief financial officer, and the part-time services of
Carmen J. (Tony) Lotito, marketing director.  They serve without receiving
a regular monthly salary check.  It will be difficult to replace any of them
unless we obtain the liquid resources to pay salaries.

Kaolin

        Kaolin is a mineral term for a hydrated aluminum silicate with the
general formula, AL2 SI2 O5 (OH)4.  It occurs in a broad range of particle
sizes from 200 microns down to about 0.2 microns.  It also occurs in a variety
of crystal structures and shapes.  The Utah kaolin is quite white in the
ground.  Dry processing retains that whiteness.

The Market for Kaolin

        Kaolin is commonly known as "China clay" and is used extensively as a
mineral filler in paint, plastics, paper, ceramics, pharmaceuticals and
cosmetics, because it does not react chemically.  It also has a white color
and smoothness after grinding.  Industrial users of kaolin combine it with
other raw materials, called formulations, and have developed over 600
different applications.  The largest single application is for coating paper
to hide the pulp strands and to give the paper a gloss finish.  Another major
use is in the paint industry as an extender to reduce the amount of titanium
dioxide needed to reflect light.  Kaolin is also used in refractory clays,
plastics, ceramics, rubber and fiberglass.

Results of Tests on the Utah Clay Deposits

        The kaolin taken from our White Mountain site in the test runs shows
that the mineral can be removed by a ripper on a caterpillar tractor and
loaded on trucks with a front end loader.

        The kaolin must be processed to bring it to industry standards.  Utah
Clay has tested the stages of the processing that are needed for these
industry standards.  These tests include:

        o       grinding to small particle sizes

        o       calcination - a process of heating the clay to about 1800
                degrees Fahrenheit for a time, which changes its molecular
                structure, and

                                       12
<PAGE>

        o       paint formulation tests.

These tests have outlined two classes of products that can fit into
established markets.  These are an uncalcined kaolin clay and a calcined
kaolin clay, each in various small particle sizes.

Competition

        The United States is the largest single producer of kaolin in the
world.  Currently, ninety percent of the U.S. production comes from deposits
in Georgia and South Carolina.  It has been mined from this area for over 90
years.  There are several companies located in this area that provide this
kaolin to the U.S. and world markets, companies against whom we will have to
compete should we obtain production of kaolin.  Most of the standards for the
world industry are based on the kaolin from this area.

Distribution Methods

        There are numerous companies in the U.S. whose business is the
distribution of industrial minerals and chemicals.  These companies normally
have specific regions where they operate.

        We anticipate that any sale of kaolin products by us, should we
encounter commercial quantities of kaolin and obtain the capital to develop
them, would be done through these third-party distributors of industrial
minerals.

Patents

        Utah Clay has no patents.

Government Approval of Principal Products

        There is no need to obtain government approval to sell kaolin and
kaolin products.  The mining leases of the company, owned or under option to
lease, are mining claims or leases of lands owned by the U.S. Government or
the State of Utah.  Annual rentals of $100 per claim for the federal mining
claims must be paid to the Bureau of Land Management.  The annual lease
payment to the State of Utah totals $2,106 for the four state leases.

Government Regulations

        The permitting of exploration work we have on U.S. Government leases
in Utah is subject to federal regulations that are co-administered by the Utah
State Division of Oil, Gas and Mining and the Bureau of Land Management. We
have obtained a small miner's permit for the White Mountain site from the
Bureau of Land Management and the State of Utah's Division of Oil, Gas and
Mining.  This permit allows us to continue to remove tonnage of kaolin from
the site for commercial testing.

                                      13
<PAGE>

        The White Mountain and Oro Blanco sites have been surveyed for
sensitive plant species.  The survey was conducted by a certified
environmental firm retained by the company.  No sensitive species were found
on either site.

Costs and Effects of Complying with Environmental Laws

        There are costs involved in complying with environmental laws in the
exploration for kaolin.  Disturbances to the land caused by our exploratory
drilling will have to be reclaimed to a state typical of the surrounding area.

Employees

        We have two full time employees and two part time employees.  The full
time employees are Dennis S. Engh, president, and Thomas F. Harrison, vice
president and chief financial officer.  The part time employees are Carmen
(Tony) Lotito, marketing director, and Daniel H. Engh, vice president.  We
estimate that our part-time employees work for us approximately fifteen hours
a week.

Working Capital Requirements

        We need approximately $500,000 to conduct a proper drilling and
testing exploration program on our White Mountain and Oro Blanco leases
during the next twelve months.  We have not identified a source of this
capital.  However, we need little working capital to survive day-to-day.  Our
full-time and part-time employees and consultants will accept stock in lieu
of cash for their personal services, as they have mainly done in the past.

        We have a stock subscription receivable of $98,100 as of June 30,
2000 from which our current cash requirements are being met.  We should be
able to continue to satisfy our cash requirements until March 2001 from this
source.

Product Research and Development During the Next Twelve Months

        Subject to our obtaining the necessary funds, we propose to perform
approximately $50,000 in research and development during the next twelve
months in an effort to determine the best calcination parameters for
processing kaolin for use in cement.  We have been and are working with an
industry partner with regard to the use of partially calcined kaolin in cement.

                                     14
<PAGE>

Additional Employees

        We have no plans to hire additional employees until we should
establish that we have commercial reserves of kaolin and obtain the funds to
develop them.

                            DESCRIPTION OF PROPERTY

     We have mining leases to extract minerals from mining claims in the White
Mountain area and the Oro Blanco area in western Utah. We have options to
acquire mining leases to extract minerals from mining claims in the Koosharem
area and the Kimberly area in central Utah and in the Topaz area in western
Utah.  The properties are near the Union Pacific rail lines and interstate
tracking routes I-70 and I-15.

Location and Means of Access to the Properties

     White Mountain Claims.  The White Mountain claims are located in Beaver
County, Utah approximately 25 miles west of Milford, Utah.  Forty-one federal
placer and overlapping lode claims are located in Sections 4-10 in Township 29
South, Range 13 West and in Sections 1 and 12 in Township 29 South, Range 14
West.

     Access to the area is provided by county gravel roads and 1.6 miles of
unimproved, Bureau of Land Management ("BLM") roads.  Limited upgrade of the
BLM roads would be necessary to bring mining equipment to the White Mountain
site.

                                       15
<PAGE>

     Oro Blanco Claims.  The Oro Blanco claims are located six miles west of
the White Mountain claims in Beaver County, Utah. Ninety-one federal placer
and overlapping lode claims and four Utah State mineral leases covering these
deposits are located in Sections 13-15, 21-24, 25-28, 32 and 34-36 in
Township 29 South, Range 15 West and in Sections 1-3 and 10, 11 and 18 in
Township 30 South, Range 15 West.

     Access to the property is provided by county roads and unimproved BLM
roads.  Limited upgrades of the BLM roads would be necessary to bring mining
equipment to the Oro Blanco site.

     Koosharem Claims.  The Koosharem claims are located in Piute and Sevier
Counties, Utah.  Twelve unpatented federal placer and overlapping lode claims
are located on lands managed by the National Forest Service in Townships 26
and 27 South, Ranges 1 and 2 West.

     Access to the area is provided by BLM roads.  The road is currently used
by another mining operation adjacent to our claims.

     Kimberly Claims.  The Kimberly claims are located in Sevier County,
Utah.  Twenty-six unpatented federal placer and overlapping lode claims are
located on lands managed by the National Forest Service in Township 26 South,
Range 4.5 West.

     Access to the site is provided by unimproved Forest Service roads.
Limited upgrade of the roads would be necessary to bring mining equipment to
the site.

     Topaz Claims.  The Topaz claims are located in Juab County, Utah
approximately 40 miles west of Delta, Utah.  Twenty-six federal placer and
overlapping lode claims are located on lands managed by the National Forest
Service in  Township 13 South, Ranges 10, 11 and 12 West and Township 14
South, Range 11 West.

     Access to the area is provided by county gravel roads and unimproved BLM
roads.  Limited upgrades to the BLM roads would be required to bring mining
equipment to the site.

Description of Our Title

     White Mountain Claims.  The lode mining claims are reserved from the BLM
in the name of Don and Anola Fullmer, who are unaffiliated with our company.

     The Fullmers have granted a mining lease to Dennis S. Engh and Daniel H.
Engh.  Dennis Engh is president and a director of Utah Clay, and Daniel Engh
is a vice president and director of Utah Clay.

        o        This lease from the Fullmers provides for -

        o        an annual $5,000 minimum lease payment,

        o        a minimum production requirement of 6,000 tons a year starting
                 in 2005,

        o        a $2.50 a ton production royalty payment with a Consumer Price
                 Index annual escalator clause on the royalty, and

        o        the payment of all annual fees to the BLM to maintain the
                 claims.

     The lease expires March 15, 2005, unless commercial production of at
least 5,000 tons a year is being obtained from any or all of the claims
subject to the lease.  The lease extends perpetually thereafter if the
production minimums are met.  The Engh family has incorporated the Fullmer
lease with their own placer claims into one lease assigned to Utah Clay as
described below.

                                       16
<PAGE>

     The White Mountain placer claims are held by the Engh family, who have
granted a mining lease to Utah Clay. These persons include Dennis and Judith
Engh, husband and wife; Daniel H. and Connie Engh, husband and wife;
Darin D. Engh, and Holly Engh Kingdon (the "Engh Family"). Dennis Engh is
president and a director of Utah Clay, the brother of Daniel Engh and the
father of Darin Engh and Holly Engh Kingdon.  Daniel Engh is a vice president
and a director of Utah Clay.  Darin Engh is a director of Utah Clay.

        The Engh family lease provides for -

        o       a $5,000 minimum annual lease payment to the Enghs or a $2.50
                a ton production royalty payment with a Consumer Price Index
                escalation clause, whichever is greater,

        o       a three percent royalty payment on the gross value of all ores
                taken from the property,

        o       the payment of all fees required to maintain the claims with
                the BLM, and

        o       all the terms of the Engh lease with the Fullmers for the lode
                claims to be met by Utah Clay.

        The term of the Engh family lease is March 27, 2004 and thereafter as
long as commercial production is obtained.

        There appears on the next page a detailed map of Utah Clay's White
Mountain property.  There is shown on the map outlines of -

        o        the claims area,

        o        the Blue Placer claims,

        o        the Julie White placer claims, and

        o        the Julie White lode claims.









                                          17
<PAGE>

                        (Detailed map of Utah Clay's
                          White Mountain property
                         included in courtesy copies
                         [not filed electronically])

There is shown on the map outlines of -

        o        the claims area,

        o        the Blue Placer claims,

        o        the Julie White placer claims, and

        o        the Julie White lode claims.

                                          18
<PAGE>

             Oro Blanco Claims.  These 91 federal lode and placer claims and
four Utah State mineral leases are all held by the Engh family.  A 5.5
percent production royalty on ores taken from the four state leases must be
paid to the State of Utah.

     The Engh family has granted a lease on these properties to Utah Clay.
Utah Clay is to pay -

        o       all fees to the BLM to maintain the claims,

        o       and a $5,000 minimum annual lease payment to the Enghs or a
                $2.50 a ton production royalty payment with a Consumer Price
                Index escalation clause, whichever is greater, and

        o       a production royalty of three percent on the gross value of
                the ores taken from the property.

        The term of the lease is March 27, 2004, and as long thereafter as
commercial production is maintained.

        There appears on the next page a detailed map of Utah Clay's Oro
Blanco property.  There is shown on the map outlines of -

        o        the mining area of interest,

        o        the Engh Family lode claims,

        o        the Engh Family placer claims, and

        o        the State of Utah mineral leases.








                                           19
<PAGE>


                        (Detailed map of Utah Clay's
                         Oro Blanco property
                         included in courtesy copies
                         [not filed electronically])

There is shown on the map outlines of -

        o        the mining area of interest,

        o        the Engh Family lode claims,

        o        the Engh Family placer claims, and

        o        the State of Utah mineral leases.

                                          20
<PAGE>

        Koosharem, Kimberly and Topaz Claims.  These claims are all reserved
from the BLM in the name of Don and Anola Fullmer, who are unaffiliated with
our company.  The Fullmers have granted leases on the claims to Daniel and
Dennis Engh, whose affiliation with Utah Clay is described above.  Daniel and
Dennis Engh have granted options to Kaolin of the West, LLC, for it to obtain
an assignment of the leases.  The members and owners of Kaolin of the West,
LLC, are Dennis S. Engh, Daniel H. Engh, Thomas F. Harrison and Carmen J.
(Tony) Lotito.

        The royalty payments for the leases are identical to those of the
White Mountain mining claims, including the royalty payments to the Enghs and
the Fullmers.

        Each of the three options expires March 27, 2004.  A payment of
$10,000 for each option - $5,000 to the Fullmers and $5,000 to the Enghs -
must be paid by June 10 of each year to extend the options past that date as
well as the payment of all federal and state rentals, taxes and other payments
associated with the mining claims.  To exercise each option, Utah Clay must
pay to the owners of Kaolin of the West, LLC, in cash or in common stock of
the company, an amount of cash or common stock equal to the fair market value
of the premises subject to the optioned leases. The fair market value will be
determined by reference to an evaluation of any kaolin reserves as determined
by an independent engineer.

        The mining claims of the three leases under option to the company
expire on March 27, 2004 unless by such date commercial production of at least
5,000 tons a year is being obtained from any or all of the claims subject to
each of the leases. Once the required level of commercial production has been
obtained, the term of each lease is extended for so long as the production
requirement is met.

History of Mineral Exploration

        Both White Mountain and Oro Blanco have a history of mineral
exploration.  The following descriptions concern areas on the leases of Utah
Clay.

    White Mountain. Earth Sciences conducted some exploratory drilling on
property that is now under our control in White Mountain in the late 1960s and
early 1970s.  Earth Sciences was a consortium of companies that was looking
for commercial deposits of alunite. They found alunite and associated deposits
of kaolin by rotary percussion drilling.  Data for these holes is not
available.  An overview of the geology and a summary of their drilling results
is outlined in the published Final Environmental Statement date stamped August
26, 1977 by the BLM and signed by Curt Berklund, Director, Bureau of Land
Management.

                                       21
<PAGE>

     Buena Vista Mining drilled seven holes on the White Mountain lease in
1992.  Buena Vista was a company controlled by the Engh Family.  The Enghs
have made that information accessible to Utah Clay.  The cores were stored and
are available for chemical and brightness analysis.

     Utah Clay has an open test pit that reveals high brightness kaolin
exposed at the surface.  Samples have been taken from the pit to test the
kaolin for use in paints and other industries.

     Neither proven nor probable reserves have been established.

     Oro Blanco.  Earth Sciences conducted extensive exploration for
molybdenum, uranium, gold and flourite in the Oro Blanco region of the
Wah Wah Mountains in the late 1960s and early 1970s.  Earth Sciences drilled
241 core and rotary holes in the area subject to our claims.  They found
deposits of both kaolin and alunite.  This information is outlined in a report
by Joseph Shearer, a registered geologist.  He was retained by Fire Clay
Minerals, Inc., a company controlled by the Engh Family.

     Fire Clay Minerals, Inc. next drilled 104 core holes in the area subject
to our placer claims.  The holes total 10,982 feet and outline a deposit of
high brightness kaolin and alunite.  This drilling was done in 1989 and is
outlined in a report by R.R. Culpert, Ph.D.

     An area of 130 by 300 feet was stripped of overburden to expose a kaolin
deposit.  Samples have been taken from this area to test for brightness and
chemistry.

     Neither proven nor probable reserves have been established.

     Koosharem and Kimberly Claims.  There have been no significant operations
on these claims other than the annual assessment work on the perceived
deposits.

     Topaz Claims. Utah Clay conducted a limited drilling program on the Topaz
claims property in 1995.  Evidence of a certain form of kaolite, called
halloysite, was found.  Drilling was not sufficient to prove any reserves.

Plant and Equipment

     There is no plant or equipment at any of the sites of the mining claims.

     Power can be supplied to the White Mountain site from Utah Power &
Light's grid four miles to the east.   Power can be supplied to the
Oro Blanco site from Utah Power & Light's grid ten miles to the east.

                                        22
<PAGE>

Plan of Operations for the Next Twelve Months

        We earlier entered into two agreements for the preliminary evaluation
of our properties and the cost of building a processing facility.

        ISG Resources, Inc.  We provided access to our properties to ISG
Resources, Inc. of Salt Lake City, Utah, for the purpose of enabling it to
determine the feasibility of a joint venture between it and our company for
the mining, production and marketing of certain kaolin clay products from our
properties.  ISG Resources twice extended the term of this agreement.  It
finally advised us that our kaolin would be acceptable for producing a product
that it markets but that it markets an insufficient quantity of this product
to justify building a production facility solely for this product.

        Precision Systems Engineering.  Precision Systems Engineering of Salt
Lake City, Utah was employed in June 1999 to provide an estimate of the cost
of designing and constructing a kaolin clay processing facility for our
company.  It provided an initial estimate but, due to our inability to pay for
a complete study, design and estimate, we and it suspended further efforts in
this regard until we can pay for a complete design and estimate.

        During the next twelve months we propose to re-analyze the seven core
holes that were drilled on the White Mountain property by Buena Vista Mining
in 1992.  This analysis will cover the brightness, alteration minerals,
percent of alteration and color along with other tests.  Then, subject to the
availability of funds, we will conduct a new drilling program.  Our plan
provides that holes will be drilled on 200-foot spacing to define the areas
of greatest shallow, high brightness kaolinite.  The drilling will commence
outward from the test pit where a previous hole encountered 136 feet of white
kaolin.  The next phase of drilling will concentrate on the highest potential
areas found in the first holes.  The spacing will be 100 feet.  The holes
will be drilled to 150 feet.  The drilling will produce cores.  Samples from
these cores will be tested for brightness, color, specific gravity, chemical
composition and contaminates. The goal of this drilling and analysis of the
cores is to establish the presence of mineralized material.  We will then
combine this information with the requirements of industry standards, prices
of marketable kaolin and recovery costs to determine the degree of legal and
economic feasibility of further activities.

        Should this determination be favorable for further activities, we will
seek the funds needed to construct a processing facility.  The initial
engineering and design work performed for us by Precision Systems Engineering
concluded that the cost of a processing facility will be from $5 million to

                                         23
<PAGE>

$10 million, depending on the capacity of the facility.  We have not located
a source of these funds.

        We estimate it will take approximately one year after the funds are
committed to the facility to complete its design and construction and to make
it operational.  Only then would we first obtain revenues for our company.

        We have not identified a source of capital for our drilling program.
We propose to approach persons known to our management and familiar with our
company's history as the source of this capital.

     Oro Blanco.  A drilling and testing program similar to that planned for
White Mountain is contemplated.  There was an indication from the previous
program that a promising trend of kaolin continues to the east past where the
previous drilling program stopped.  This trend will be explored in the new
drilling program.

     Koosharem, Kimberly and Topaz Claims.  We have no present proposed
program of exploration on these properties that are subject to our options to
acquire.  They are without known reserves.

Rock Formations and Mineralization

        White Mountain: Kaolin, hydrated silica and alunite occur as a mixed
mineral system in the White Mountain region of Utah in the lower and upper
tuff members of an unnamed geological formation.  These minerals vary in their
percentages throughout the deposits and have formed where acid-rich,
hydrothermal fluids have strongly altered the tuffs.  "Tuff" is a geological
term for rock composed of finer kinds of volcanic detritus commonly fused
together by heat.

        The percentages of the three primary components vary depending upon
the composition of the tuff and the heat and character of the hydrothermal
fluids.  Kaolin, for example can occur from 99% down to 25%.  Alunite
typically occurs in the range 2% to 12%.  Hydrated silica in the form of opal
and opal CT make up the major portion of the remainder.  Because these three
components are all white and all insoluble in water, their combination makes a
good, non-reactive white pigment for incorporation in paint, plastics, paper
and other products.  When the mixtures are calcined at high temperatures, the
products are virtually indistinguishable from 100% kaolin calcined at the same
temperature, except that the hydrothermal materials are whiter.

        Strong alteration of the tuff to kaolin, alunite and hydrated silica
occurs for about two miles along east-west faults.  Local centers for high

                                      24
<PAGE>

kaolin and alunite occur where north-northwest faults intersect the main
east-west structural feature.  Individual centers range in size from 250 to
500 feet in width and extend 2000 feet in length along the principal feeder
fault.  In these alteration zones, the kaolin and alunite grade outward in
composition.  At their termination, bands of high iron oxide, red in color,
occur, usually followed by hard silica.

        Chemical analyses of the whitest regions within the deposit suggest
small amounts of iron oxide (as hematite and goethite) of 0.3%, occasional
calcium sulfate (0.5%) and some jarosite (0.5%), a mineral similar in
character to alunite but containing iron structurally substituted for
aluminum.  The remainder of the impurities, as Mg, Ca, K, Na, and Ti, are less
than 2% total and are similar to impurities in commercial kaolins from Georgia
and South Carolina.

        These impurities are not separated during the commercial processing
and have no deleterious effect on pigment properties in the end products.

        Numerous chemical analyses of the kaolinite have been done.  They
uniformly show low amounts of contaminants, specifically iron.

        Typical amounts of other minerals are:

                Fe                0.172%
                Na2O              0.296%
                K2O                1.48%
                CaO               0.505%
                MgO               0.118%

     Oro Blanco.  The geology is similar to that at White Mountain, but the
alteration is more complex.

     Koosharem, Kimberly and Topaz Claims.  Each of these areas shows the
hydrothermal alteration of volcanic tuffs.  The geology has not been studied
in sufficient detail to describe it accurately.

Geology

        Drilling and testing which has been conducted to date on our
properties suggest that the cap rock (mineralization which occurs on top of
the kaolin) is shallow in many locales, often less than 25 feet in thickness.
The veins of mineralized kaolin (and associated minerals) under this cap rock
are often quite wide and of a consistent color and composition, especially
after the calcination process is employed.  Further drilling and analyses and
required to evaluate the usable volume and grade as well as to develop the
initial mining plan.

                                       25
<PAGE>

              CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        During 1998 the company issued 2,100,774 shares of its common stock
at $0.18 a share to the following officers and directors of the company,
persons owning more than five percent of any class of security of the company,
or to members of their immediate family:

                            Relationship           No. of Shares    Value of
     Person                  to the Company            Issued      Consideration
     ------                  --------------          ---------     -------------

Della Engh                  Mother of Dennis and       823,333       $ 148,200
                            Daniel Engh

Dennis S. Engh              President and Director     581,900         104,742

Carmen J. (Tony) Lotito     Director of Marketing      332,659          59,879
                            and Director

Thomas F. Harrison          Vice President, Chief      135,872          24,467
                            Financial Officer and
                            Director

Daniel H. Engh              Vice President and         227,010          40,862
                                                     ---------       ---------
                            Director
                                                     2,100,774       $ 378,150

        The consideration we received from Della Engh for the above shares was
the cancellation of loan indebtedness in the indicated amount owed by Utah
Clay to her.  The consideration we received from the other persons named above
was the cancellation of debt in the indicated amounts arising from unpaid
compensation for their services as officers of Utah Clay.

        On December 27, 1999 we issued 17,739,500 shares of our common stock
as the purchase price for an assignment of the Oro Blanco mining lease.  The
shares were valued at $0.001 a share for a total purchase price of $17,739.50.
At the time of the purchase, our common stock had not traded in the
over-the-counter market for several weeks, and the stockholders' capital in
Utah Clay was impaired.  The seller of the Oro Blanco lease was Utah Kaolin
Corporation, an affiliate of Utah Clay by reason of common directors of the
two companies and by reason of common control of the two companies through
majority ownership of the voting stock of each company by the directors of the
two companies.

        Utah Kaolin Corporation subsequently distributed the 17,739,500 shares
to its shareholders.  One of those shareholders, Thomas J. Kenan, who is legal
counsel to Utah Clay and to Utah Kaolin, transferred 650,194 shares to a trust
under the control of his spouse, Marilyn C. Kenan, who also is the primary
beneficiary of the trust.  He donated remaining 10,000 shares to his legal

                                         26
<PAGE>

assistant, Sherie S. Adams. The complete distribution of the 17,739,500 shares
of Utah Clay stock by Utah Kaolin was as follows:


                                                                      No. of
                                                                      Shares
  Person                    Relationship to the Company               Issued
  ------                    ---------------------------               ------

Dennis S. Engh              President and Director                   3,979,297

Daniel H. Engh              Vice President and Director              3,979,297

Thomas F. Harrison          Vice President and Director              3,869,666

Carmen J. (Tony) Lotito     Director of Marketing and Director       1,984,833

Marilyn C. Kenan,           Spouse of Thomas J. Kenan,                 650,194
Trustee of the Marilyn      securities law counsel to the
C. Kenan Trust              company

Dorcas Ardella Engh         Mother of Dennis S. Engh and               850,000
                            Daniel H. Engh

Sherie S. Adams             Legal Assistant to Thomas J.                10,000
                            Kenan, securities law counsel to
                            the company

Robert N. Nelson and        Brother-in-law and sister of             1,300,000
Jeanette E. Nelson, TTEE    Dennis S. Engh and Daniel H. Engh,
FBO Nelson Family           and uncle and aunt to Darin Engh
Revocable Trust UAD 2-
28-91

Raymond and Olga Nelson     Son and daughter-in-law of Robert          200,000
                            N. Nelson and Jeanette E. Nelson

Jack Nelson                 Son of Robert N. and Jeanette E.           100,000
                            Nelson

Kendrick O. Morrison        None (non-affiliated shareholder)          816,213


           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        Our common stock was earlier quoted on the OTC Bulletin Board under
the stock symbol "UTCL".  The high and low bid information for the stock
during 1998, 1999 and the first quarter of 2000 is set forth below.  The
information was obtained from the OTC Bulletin Board and reflects inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions:

                Calendar
                Quarter         High              Low
               ---------       -------         ---------

         1998:
                1st Qtr         2.125           1.75
                2nd Qtr         2.0625          1.625
                3rd Qtr         1.875           1.3125
                4th Qtr         1.53125         0.125

                                         27
<PAGE>

        1999:
                1st Qtr         0.3438          0.1600
                2nd Qtr         0.8438          0.1875
                3rd Qtr         0.6250          0.1300
                4th Qtr         0.5000          0.1875

        2000:
                1st Qtr         1.125           0.25


        During the period from May 3, 2000 to the date of this prospectus
our common stock was removed from the Bulletin Board and was quoted only in
the "Pink Sheets".  We anticipate that our common stock will once again be
admitted to quotation privileges on the Bulletin Board within a few days
after the date of this prospectus.

Holders.  There are approximately 200 holders of record of our common stock.
There are three holders of record of our Series A Preferred Stock, for which
there is no trading market.

Dividends.  No cash dividends have been declared during the last two years for
either the common stock or the Series A Preferred Stock.  There are no
restrictions that limit the ability of the company to pay dividends on the
common stock or that are likely to do so in the future other than the
requirement that dividends be paid first to the holders of the company's
preferred stock.

                         PENNY STOCK REGULATIONS

        Our common stock has always traded at a price less than $5 a share and
is subject to the rules governing "penny stocks."

        A "penny stock" is any stock that:

        o       sells for less than $5 a share,

        o       is not listed on an exchange or authorized for quotation on
                The Nasdaq Stock Market, and

        o       is not a stock of a "substantial issuer."  Utah Clay
                Technology is not now a "substantial issuer" and cannot become
                one until it has net tangible assets of at least $5 million,
                which it does not now have.

        There are statutes and regulations of the Securities and Exchange
Commission that impose a strict regimen on brokers that recommend penny stocks.

                                       28
<PAGE>

The Penny Stock Suitability Rule

        Before a broker-dealer can recommend and sell a penny stock to a new
customer who is not an institutional accredited investor, the broker-dealer
must obtain from the customer information concerning the person's financial
situation, investment experience and investment objectives.  Then, the
broker-dealer must "reasonably determine" (1) that transactions in penny
stocks are suitable for the person and (2) that the person, or his advisor,
is capable of evaluating the risks in penny stocks.

        After making this determination, the broker-dealer must furnish the
customer with a written statement setting forth the basis for this
suitability determination.  The customer must sign and date a copy of the
written statement and return it to the broker-dealer.

        Finally the broker-dealer must also obtain from the customer a written
agreement to purchase the penny stock, identifying the stock and the number of
shares to be purchased.

        The above exercise delays a proposed transaction.  It causes many
broker-dealer firms to adopt a policy of not allowing their representatives to
recommend penny stocks to their customers.

        The Penny Stock Suitability Rule, described above, and the Penny Stock
Disclosure Rule, described below, do not apply to the following:

        o       transactions not recommended by the broker-dealer,

        o       sales to institutional accredited investors,

        o       sales to "established customers" of the broker-dealer -
                persons who either have had an account with the broker-dealer
                for at least a year or who have effected three purchases of
                penny stocks with the broker-dealer on three different days
                involving three different issuers, and

        o       transactions in penny stocks by broker-dealers whose income
                from penny stock activities does not exceed five percent of
                their total income during certain defined periods.

                                        29
<PAGE>

The Penny Stock Disclosure Rule

        Another Commission rule - the Penny Stock Disclosure Rule - requires
a broker-dealer, who recommends the sale of a penny stock to a customer in a
transaction not exempt from the suitability rule described above, to furnish
the customer with a "risk disclosure document."  This document includes a
description of the penny stock market and how it functions, its inadequacies
and shortcomings, and the risks associated with investments in the penny stock
market.  The broker-dealer must also disclose the stock's bid and ask price
information and the dealer's and salesperson's compensation related to the
proposed transaction.  Finally, the customer must be furnished with a monthly
statement including prescribed information relating to market and price
information concerning the penny stocks held in the customer's account.

Effects of the Rule

        The above penny stock regulatory scheme is a response by the Congress
and the Commission to known abuses in the telemarketing of low-priced
securities by "boiler shop" operators.  The scheme imposes market impediments
on the sale and trading of penny stocks.  It has a limiting effect on a
stockholder's ability to resell a penny stock.

        Our common stock likely will continue to trade below $5 a share and
be, for some time at least, a "penny stock" subject to the trading market
impediments described above.

Potential De-Listing of Common Stock

        NASD Eligibility Rule 6530 issued on January 4, 1999, states that
issuers that do not make current filings pursuant to Sections 13 and 15(d) of
the Securities Exchange Act of 1934 are ineligible for listing on the OTC
Bulletin Board.  Issuers who are not current with such filings are subject,
first, to having an "E" appended to their trading symbol and, then, to
de-listing if they fail to become current within a short period of time.
Our common stock was delisted on May 3, 2000, because we were not a reporting
company.  We will become a reporting company the day the Commission makes
effective our registration statement of which this prospectus is a part.
We anticipate our Bulletin Board trading privileges, under our previous stock
trading symbol of "UTCL", will be restored within a few days after the date
on the cover of this prospectus.  Even so, we will remain subject to delisting
at any time that we are not current in filing reports in the future.

Reports to Security Holders

        We will file reports with the Securities and Exchange Commission.
These reports are annual 10-KSB, quarterly 10-QSB and periodic 8-K reports.

                                        30
<PAGE>

This prospectus is part of a registration statement that, when effective at
the Securities and Exchange Commission, subjects us to these reporting
requirements.  We will furnish stockholders with annual reports containing
financial statements audited by independent public or certified accountants
and such other periodic reports as we may deem appropriate or as required by
law.  The public may read and copy any materials we file with the SEC at the
Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549.  The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.  Utah Clay is an
electronic filer, and the SEC maintains an Internet Web site that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the SEC.  The address of such
site is http://www.sec.gov.

                           EXECUTIVE COMPENSATION

        No executive officer of the company has received total compensation
in any of the last three years that exceeds $100,000.  The table below sets
forth all compensation awarded to, earned by, or paid to Dennis S. Engh, the
president of the company during 1999:

<TABLE>
<CAPTION>
                                                                Long Term Compensation
                                                              ---------------------------
                                                 Awards
                                       -------------------------
       Annual Compensation                            Securities           Payouts
- ------------------------------------                Underlying   ----------------------
                        Other Annual   Restricted     Options/     LTIP      All Other
Year   Salary   Bonus   Compensation   Stock Awards   SARS         Payouts   Compensation

<S>    <C>       <C>       <C>             <C>          <C>         <C>         <C>
1999   $72,000    0         0               0            0           0           0

</TABLE>

Stock Options.  We have adopted a 2000 Stock Option Plan, the major provisions
of which Plan are as follows:

        Options granted under the plan may be "employee incentive stock
options" as defined under Section 422 of the Internal Revenue Code or
non-qualified stock options, as determined by the option committee of the
board of directors at the time of grant of an option.  The plan enables the
option committee of the board of directors to grant up to 500,000 stock
options to employees and consultants from time to time.  The option
committee has granted no options.

Directors.  There are no arrangements pursuant to which directors of the
company are compensated for their services as a director.

Employment Contracts.  The company has no employment contracts with any person
or any compensatory plan or arrangement with any person that would result from
the resignation, retirement or any other termination of a person's employment

                                          31
<PAGE>

with the company or its subsidiaries or from a change in control of the
company or a change in a person's responsibilities following a change in
control of the company.

              CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                     ACCOUNTING AND FINANCIAL DISCLOSURE

        The principal independent accountant of the company or any significant
subsidiary has not resigned, declined to stand for re-election, or been
dismissed by the company during the periods for which financial statements
are included herein.

                             ADDITIONAL INFORMATION

        The company will furnish its shareholders with annual reports
containing audited financial information, reported upon by independent public
accountants.  The company shall also furnish quarterly reports for the first
three quarters of each year containing unaudited financial information.

                              FINANCIAL STATEMENTS

        The following financial statements are included as part of this
prospectus:

                                                                       Page
                                                                      ------

Independent Auditors' Report .........................................  F-1

Balance Sheets December 31, 1999 and 1998 ............................  F-2

Statements of Operations
        Year ended December 31, 1999 and 1998 ........................  F-4

Statements of Changes in Stockholders' Deficit
        From inception (March 1, 1994) to
        December 31, 1999 ............................................  F-5

Statements of Cash Flows
        Year ended December 31, 1999; year ended
        December 31, 1998; and cumulative from
        inception (March 1, 1994) to
        December 31, 1999 ............................................  F-7

Notes to Financial Statements ........................................  F-9

Balance Sheets September 30, 2000 (Unaudited) and
        December 31, 1999 ............................................  F-18

                                       32
<PAGE>

Statements of Operations (Unaudited)
        Quarter ended September 30, 2000 and 1999, and
        cumulative from inception (March 1, 1994)
        to September 30, 2000 ........................................  F-20

Statements of Changes in Stockholders' Deficit
        from inception (March 1, 1994) to
        September 30, 2000 (Unaudited)................................  F-21

Statements of Cash Flows (Unaudited)
        Quarter ended September 30, 2000 and 1999, and
        cumulative from inception (March 1, 1994)
        to September 30, 2000 ........................................  F-24

Notes to Financial Statements (Unaudited) ............................  F-26


                                       33
<PAGE>




                       INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
Utah Clay Technology, Inc.

        We have audited the accompanying balance sheets of Utah Clay
Technology, Inc.  (An Exploration  stage company) as of December 31, 1999 and
1998 and the related statements of operations, stockholders' deficit and cash
flows for the years ended December 31, 1999 and 1998, and for the period from
inception (March 1, 1994) to December 31, 1999.  These financial statements
are the responsibility of the company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used
and singnificant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Utah Clay
Technology, Inc. (An Exploration Stage company) as of December 31, 1999 and
1998 and the results of its operations and its cash flows for the years then
ended, and for the period from inception (March 1, 1994) to December 31,
1999, in conformity with generally accepted accounting principles.

        The accompanying financial statements have been prepared assuming
that the company will continue as a going concern.  As discussed in Note 11
to the financial statements, the company has suffered losses from operations
and remains in the Exploration  stage. These conditions raise substantial
doubt about its ability to continue as a going concern.  Management's plans
in regard to these matters are also described in Note 11.  The financial
statements do not include any adjustments that might result from the
outcome of this uncertainly.

                                                  /s/ Kabani & Company, Inc.

                                                      Kabani & Company, Inc.
Fountain Valley, California
March 17, 2000


                                       F-1
<PAGE>


                             Utah Clay Technology, Inc.
                           (An Exploration Stage Company)
                                  BALANCE SHEETS
                             December 31, 1999 & 1998



                                     ASSETS
                                     ------

                                                         1999           1998
                                                     -----------    -----------


Current Assets
     Cash                                            $       640    $       208
     Receivables                                             350            100
                                                     -----------    -----------

      Total Current Assets                                   990            308

Properties & Equipment
    Laboratory equipment                                   2,484          2,484
    Machine design & configuration                       128,000              -
    Mining leases                                         45,073         27,333
                                                     -----------    -----------

        Total Properties & Equipment                     175,557         29,817
                                                     -----------    -----------

                                                     $   176,547    $    30,125



















 The accompanying notes are an integral part of these financial statements.


                                        F-2
<PAGE>
<TABLE>
<CAPTION>

                             Utah Clay Technology, Inc.
                          ( An Exploration Stage Company )
                                   BALANCE SHEETS
                              December 31, 1999 & 1998




     LIABILITIES AND STOCKHOLDERS' DEFICIT                 1999            1998
     -------------------------------------             ------------    ------------
<S>                                                    <C>             <C>
Current Liabilities
     Accounts payable                                  $    358,839    $    194,541
     Advances payable- officers and directors               328,712         226,394
     Notes payable                                          149,469          25,611
                                                       ------------    ------------

        Total Current Liabilities                           837,020         446,546

Stockholders' Deficit
    Preferred stock, par value $0.001;
    10,000,000 shares authorized;
    84, 817 shares issued and outstanding                        85              85

    Common stock, par value $0.001;
       30,000,000 shares authorized; 23,331,874
       shares in1999 and 5,592,374 shares in 1998
       issued and Outstanding                                23,332           5,592
    Additional paid-in capital                            1,451,691       1,451,691
    Deficit accumulated from inception                  (2,135,581)     (1,873,789)
                                                       ------------    ------------

        Total Stockholders' Deficit                       (660,473)       (416,421)
                                                       ------------    ------------

                                                       $    176,547    $     30,125
                                                       ============    ============













  The accompanying notes are an integral part of these financial statements.

                                           F-3
</TABLE>
<PAGE>

                                Utah Clay Technology, Inc
                             (An Exploration Stage Company )
                                STATEMENTS OF OPERATIONS



                                                      Year ended December 31,
                                                    --------------------------
                                                       1999            1998
                                                     --------        --------

Revenues                                             $   -           $   -

Expenses:

Mineral lease rentals                                  64,531          48,608
General and administrative                            197,161         514,643
                                                    ---------       ---------
Loss before income taxes                            (261,692)       (563,251)
Income taxes                                              100             100
                                                    ---------       ---------
NET LOSS                                          $ (261,792)     $ (563,351)
                                                  ===========     ===========
Basic and diluted Loss per
     common share                                  $   (0.04)     $    (0.18)
                                                  ===========     ===========
Basic and diluted weighted average
    number of common shares
     outstanding                                    5,835,381       3,127,762
                                                  ===========     ===========














  The accompanying notes are an integral part of these financial statements.

                                           F-4
<PAGE>
<TABLE>
<CAPTION>


                                             Utah Clay Technology, Inc.
                                         ( An Exploration Stage Company )
                                   STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                                From Inception (March 1, 1994) to December 31, 1999



                                                                                                 Deficit
                                                                                   Additional  Accumulated
                          Preferred       Stock         Common        Stock         Paid-In       From
                           Shares         Amount        Shares        Amount        Capital     Inception        Total
                        -----------   -----------    -----------   -----------    -----------   -----------    -----------

<S>                     <C>           <C>            <C>           <C>            <C>           <C>            <C>
Shares issued for
cash March 1, 1994            --      $      --        5,600,000   $    56,000    $             $              $    56,000

Shares issued for
services March 1,
1994                          --             --       14,400,000       144,000           --            --          144,000

Net loss for period
March 1, 1994 to
December 31, 1994             --             --             --            --             --        (105,573)      (105,573)
                        -----------   -----------     -----------  -----------    -----------   -----------    -----------
Balance December
31, 1994                      --             --       20,000,000       200,000           --        (105,573)        94,427

Net loss for the year
ended December 31
1995                          --             --             --            --             --        (672,267)      (672,267)
                        -----------   -----------     -----------  -----------    -----------   -----------    -----------

Balance December
31, 1995                      --             --             --         200,000           --        (777,840)      (577,840)

1 for 10 reverse split
September 30, 1996                                   (20,000,000)     (180,000)       180,000

Change of par value
to $0.001                     --             --             --         (18,000)        18,000         --             --

Preferred stock
issued to related
parties for
cancellation of debt
September 30, 1996          84,817             85           --            --          424,000         --          424,085

Shares issued for
services in 1996                                         265,000           265         48,200         --           48,465

Net loss for the year
ended December 31
                              --             --             --            --             --       (153,669)      (153,669)
                        -----------   -----------     -----------  -----------    -----------   -----------    -----------

Balance December
31, 1996                    84,817    $        85      2,265,000   $     2,265    $   670,200   $  (931,509)   $  (258,959)



                        The accompanying notes are an integral part of these financial statements.

                                                             F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                                              Utah Clay Technology, Inc.
                                            (An Exploration Stage Company)
                               STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (CONTINUE)
                                  From Inception (March 1, 1994) to December 31, 1999


                                                                                                  Deficit
                                                                                 Additional     Accumulated
                          Preferred       Stock        Common        Stock         Paid-In         From
                            Shares        Amount       Shares        Amount        Capital       Inception        Total
                         -----------   -----------   -----------   -----------   -----------    -----------    -----------

<S>                      <C>           <C>             <C>         <C>           <C>            <C>            <C>
Balance December
31, 1996                      84,817   $        85     2,265,000   $     2,265   $   670,200    $  (931,509)   $  (258,959)

Shares issued for
cash in 1997                    --            --         100,000           100       199,900           --          200,000

Shares issued for
debt cancellation
in 1997                         --            --         165,000           165          (165)          --             --

Net loss for the year
ended December
31, 1997                        --            --            --            --            --         (378,929)      (378,929)
                         -----------   -----------   -----------   -----------   -----------    -----------    -----------

Balance December
31, 1997                      84,817            85     2,530,000         2,530       869,935     (1,310,438)      (437,888)

Shares issued for
outstanding
Warrants                        --            --         389,600           389       103,634           --          104,023

Shares issued for
debt cancellation
In 1998                         --            --       2,100,774         2,101       376,049           --          378,150

Shares issued for
services in 1998                --            --         572,000           572       102,073           --          102,645

Net loss for the year
ended December31, 1998          --            --            --            --            --         (563,351)      (563,351)
                         -----------   -----------   -----------   -----------   -----------    -----------    -----------
Balance December
31, 1998                      84,817            85     5,592,374         5,592     1,451,691     (1,873,789)      (416,421)

Shares issued for
mining lease                    --            --      17,739,500        17,740          --             --           17,740

Net loss for the year
ended December
31, 1999                        --            --            --            --            --         (261,792)      (261,792)
                         -----------   -----------   -----------   -----------   -----------    -----------    -----------

Balance December
31, 1999                      84,817   $        85    23,331,874   $    23,332   $ 1,451,691    $(2,135,581)   $  (660,473)
                         ===========   ===========   ===========   ===========   ===========    ===========    ===========


                      The accompanying notes are an integral part of these financial statements.

                                                            F-6

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                      Utah Clay Technology, Inc.
                                    (An Exploration Stage Company)
                                       STATEMENTS OF CASH FLOWS

                                                                                   Cumulative
                                                                                   from inception
                                                   Year ended      Year ended      (March 1, 1994)
                                                   December 31,    December 31,    to December 31,
                                                   1999            1998            1999
                                                   --------------  --------------  ---------------
<S>                                                <C>             <C>             <C>
Cash flows from operating activities:
Net loss                                           $    (261,792)  $    (563,351)  $   (2,135,581)
Adjustments to reconcile net loss to net cash
   used in operating activities:
   Issuance of common stock for services                        -         102,645          295,110
   Decrease in other assets                                     -           9,975                -
   (Increase) in receivables                                (250)           (100)            (350)
   Increase in Accounts payable                           164,298          67,600          507,039
                                                    -------------  --------------  ---------------
   Net cash used in operating activities                 (97,744)       (383,231)      (1,333,782)

Cash flows from investing activities:
   Mining leases                                                -               -         (27,333)
   Machine design & configuration                       (128,000)               -        (130,484)
   Net cash used in investing activities                (128,000)               -        (157,817)

Cash flows from financing activities:

   Net proceeds from advances by
   Officers/directors                                     102,318         246,856          982,747
   Proceeds from notes payable                            123,858          25,611          149,469
   Issuance of shares                                           -         104,023          360,023
                                                    -------------  --------------  ---------------
   Net cash provided by financing activities:             226,176         376,490        1,492,239

Net increase (decrease) in cash & cash
equivalent                                                    432         (6,741)              640
Cash & cash equivalent - beginning of period                  208           6,949                -
                                                    -------------  --------------  ---------------
Cash at end of period                               $         640  $          208  $           640
                                                    =============  ==============  ===============











                The accompanying notes are an integral part of these financial statements.

                                                     F-7

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                           Utah Clay Technology, Inc.
                         (An Exploration Stage Company)
                       STATEMENTS OF CASH FLOWS (CONTINUE)


                                                                               Cumulative
                                                                               from inception
                                               Year ended        Year ended    (March 1, 1994)
                                               December 31,      December 31,  to December
                                               1999              1998          1999
                                               -----------       ----------    ----------
<S>                                            <C>               <C>           <C>
Supplemental disclosures:

Cash paid during the period for:

    Interest                                    $        4,802   $    2,149    $  6,951
                                                ==============   ==========    ========

    Income tax                                  $          300   $      250    $    850
                                                ==============   ==========    ========

Non-cash investing and financing activities:

    Issuance of common stock for services       $         --     $  102,645    $295,110
                                                ==============   ==========    ========

    Issuance of preferred stock for debt        $         --     $     --      $424,085
                                                ==============   ==========    ========

    Issuance of common stock for acquisition
      of Mining rights                          $       17,740   $     --      $ 17,740
                                                ==============   ==========    ========

    Issuance of common stock against
      cancellation of debt - Advances and
      accrued expenses                          $         --     $  378,150    $802,235
                                                ==============   ==========    ========



      The accompanying notes are an integral part of these financial statements.

                                          F-8
</TABLE>
<PAGE>

                               Utah Clay Technology, Inc.
                             (An Exploration Stage Company)
                             Notes to Financial Statements
                               December 31, 1999 and 1998


Note 1- Summary of significant accounting policies

Organization and nature of operations

     Utah Clay Technology, Inc. (the "Company"), a Utah corporation, was
incorporated on March 1, 1994.  The planned operations of the Company are to
engage in mining, processing and marketing of minerals.  For the period from
inception (March 1, 1994) to December 31, 1999 the Company had no revenues.
The Company is classified as An Exploration stage company because its
principal activities involve obtaining the capital necessary to execute its
strategic business plan.

Cash and cash equivalents

     The Company considers all liquid investments with a maturity of three
months or less from the date of purchase that are readily convertible into
cash to be cash equivalents.

Issuance of share for services

     Valuation of shares for services is based on the fair market value of
services.

Use of estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Properties & equipment

     Equipment is recorded at cost.  The Company has adopted the straight-line
method in computing depreciation for financial reporting purposes and
generally uses accelerated methods for income tax purposes.  The annual
provision for depreciation will be computed principally in accordance with the
following ranges of asset lives: laboratory equipment- 3 to 5 years;
processing equipment- 3 to 10 years.  Equipment was acquired and set up in
late, 1997.  No depreciation expense has been recorded in the financial
statements as the company is yet to use any of its equipment and mining
properties. (See Note 4).


                                    F-9
<PAGE>


                         Utah Clay Technology, Inc.
                       (An Exploration Stage Company)
                        Notes to Financial Statements
                         December 31, 1999 and 1998


Reclassifications

     Certain items in the prior year financial statements have been
reclassified for comparative purposes to conform with the presentation in the
current years' presentation. These reclassifications have no effect on the
previously reported income (loss).

Income taxes

     Deferred income tax assets and liabilities are computed annually for
differences between the financial statements and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted laws and rates applicable to the periods in which the
differences are expected to affect taxable income (loss). Valuation allowance
is established when necessary to reduce deferred tax assets to the amount
expected to be realized.

Basic and diluted net loss per share

     Net loss per share is calculated in accordance with the Statement of
financial accounting standards No. 128 (SFAS No. 128), "Earnings per share".
SFAS No. 128 superseded Accounting  Principles Board Opinion No.15 (APB 15).
Net loss per share for all periods presented has been restated to reflect the
adoption of SFAS No. 128. Basic net loss per share is based upon the weighted
average number of common shares outstanding. Diluted net loss per share is
based on the assumption that all dilutive convertible shares and stock options
were converted or exercised. Dilution is computed by applying the treasury
stock method. Under this method, options and warrants are assumed to be
exercised at the beginning of the period (or at the time of issuance, if
later), and as if funds obtained thereby were used to purchase common stock
at the average market price during the period.

Stock-based compensation

     In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-
Based Compensation". SFAS No. 123 prescribes accounting and reporting
standards for all stock-based compensation plans, including employee stock
options, restricted stock, employee stock purchase plans and stock
appreciation rights. SFAS No. 123 requires compensation expense to be recorded
(i) using the new fair value method or (ii) using the existing accounting
rules prescribed by Accounting Principles Board Opinion No. 25, "Accounting
for stock issued to employees" (APB 25) and related interpretations with
proforma disclosure of what net income and earnings per share would have been
had the company adopted the new fair value method. The company adopted this
standard in 1998 and the implementation of this standard did not have any
impact on its financial statements.


                                       F-10
<PAGE>


                            Utah Clay Technology, Inc.
                          (An Exploration Stage Company)
                          Notes to Financial Statements
                            December 31, 1999 and 1998


Fair value of financial instruments

     Statement of financial accounting standard No. 107, Disclosures about
fair value of financial instruments, requires that the company disclose
estimated fair values of financial instruments. The carrying amounts reported
in the statements of  financial position for current assets and current
liabilities qualifying as financial instruments are a reasonable estimate of
fair value.

Comprehensive income

     Statement of financial accounting standards No. 130, Reporting
comprehensive income (SFAS No. 130), establishes standards for reporting and
display of comprehensive income, its components and accumulated balances.
Comprehensive income is defined to include all changes in equity, except
those resulting from investments by owners and distributions to owners. Among
other disclosures, SFAS No. 130 requires that all items that are required to
be recognized under current accounting standards as components of
comprehensive income be reported in a financial statements that is displayed
with the same prominence as other financial statements. The company adopted
this standard in 1998 and the implementation of this standard did not have a
material impact on its financial statements.

Reporting segments

     Statement of financial accounting standards No. 131, Disclosures about
segments of an enterprise and related information (SFAS No. 131), which
superceded statement of financial accounting standards No. 14, Financial
reporting for segments of a business enterprise, establishes standards for
the way that public enterprises report information about operating segments
in annual financial statements and requires reporting of selected information
about operating segments in interim financial statements regarding products
and services, geographic areas and major customers. SFAS No. 131 defines
operating segments as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in
assessing performances. The company adopted this standard in 1998 and the
implementation of this standard did not have a material impact on its
financial statements.

Pension and other benefits

     In February 1998, the Financing accounting standards board issued
statement of financial accounting standards No. 132, Employers'
disclosures about pension and other post-retirement benefits
(SFAS No. 132), which standardizes the disclosures requirements for pension
and other post -retirement  benefits. The company adopted this standard in
1998 and the implementation of this standard did not have any impact on its
financial statements.

                                    F-11
<PAGE>

                         Utah Clay Technology, Inc.
                       (An Exploration Stage Company)
                       Notes to Financial Statements
                        December 31, 1999 and 1998


Accounting for the costs of computer software developed or obtained for
internal use

     In March 1998, the Accounting standards executive committee of the
American institute of certified public accountants (ASEC of AICPA) issued
Statement of position (SOP) No. 98-1, "Accounting for the costs of computer
software developed or obtained for internal use", effective for fiscal years
beginning after December 15, 1998. SOP N0. 98-1 requires that certain costs
of computer software developed or obtained for internal use be continued
capitalized and amortized over the useful life of the related software. The
company adopted this standard in fiscal 1999 and the implementation of this
standard did not have a material impact on its financial statements.

Costs of start-up activities

     In April 1998, the ASEC of AICPA issued SOP No. 98-5, "Reporting on the
costs of start-up activities", effective for fiscal years beginning after
December 15, 1998. SOP 98-5 requires the costs of start-up activities and
organization costs to be expensed as incurred. The company adopted this
standard in fiscal 1999 and the implementation of this standard did not have
a material impact on its financial statements.

Accounting developments

                        In June 1998, the FASB issued SFAS No. 133,
"Accounting for derivative instruments and hedging activities", effective for
fiscal years beginning after June 15, 1999, which has deferred to June 30,
2000 by publishing of SFAS No. 137. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to
as derivatives), and for hedging activities. This statement requires that an
entity recognize all derivative as either assets or liabilities in the
statement of financial condition and measure those instruments at fair value.
The accounting for changes in the fair value of a derivative instrument
depends on its intended use and the resulting designation. The company does
not expect that the adoption of this standard will have a material impact
on its financial statements.

Note 2-  Income taxes

     Since the Company has not generated taxable income since inception, no
provision for income taxes has been provided (other than minimum franchise
taxes paid to the State of Utah).  Differences between income tax benefits
computed at the federal statutory rate and reported income taxes for 1999
and 1998 are primarily attributable to the valuation allowance for net
operating losses (NOL) and other permanent differences.


                                   F-12
<PAGE>

                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                      Notes to Financial Statements
                        December 31, 1999 and 1998


The net deferred tax (benefit) due to NOL carried forward, as of
December 31, 1999 and 1998, consisted of the following:


                                                1999          1998
                                             ----------    ----------

Deferred  tax  asset                         $  418,389    $  313,672
Deferred  tax asset valuation allowance        (418,389)     (313,672)
                                             ----------    ----------
  Balance as of December 31                  $     --      $     --
                                             ==========    ==========


     A summary of Net operating losses carried forward and their expiration
date is as follows:

                     Year of Expiration             Net Operating Losses
                     ------------------             --------------------
                                   2009                     $    105,573
                                   2010                           79,963
                                   2011                          112,380
                                   2012                          199,733
                                   2013                          286,532
                                   2014                          261,792
                           ------------                     ------------
                                  Total                     $  1,045,973
                           ============                     ============





Note 3-  An exploration stage company

     An exploration stage company is one for which principal operations of
mining  have not commenced or principal operations have generated an
insignificant amount of revenue.  Management of an exploration stage company
devotes most of its activities in conducting exploratory mining operations.
The company expenses all exploration costs as incurred. Operating losses
have been incurred through December 31, 1999, and the Company continues to
use, rather than provide, working capital in this operation.  Although
management believes that it is pursuing a course of action that will
provide successful future operations, the outcome of these matters is
uncertain.

Note 4-  Mining lease and related expenditures

     Management and other shareholders formed the Company to obtain the
necessary financing to mine, explore, develop, operate and sell kaolin.
The Company owns two mining lease (including acquisition of a mining
lease in December 1999) and has options to acquire three other mining leases
held by founders (these parties are also directors and officers of the
Company) of the Company. The Company expenses all acquisition, Exploration
and development costs that relate to specific mineral properties.


                                     F-13
<PAGE>


                           Utah Clay Technology, Inc.
                         (An Exploration Stage Company)
                          Notes to Financial Statements
                           December 31, 1999 and 1998


The realization of the costs of mining properties and deferred expenses is
dependent upon sales of  kaolin on a commercial basis from the reserves of
ore bodies.  For the period from inception ( March 1, 1994 ) to December
31, 1999 the Company had no revenues.  To commence operations, the Company's
management believes significant additional equity and debt financing will be
required.

Note 5- Accounts payable and accrued expenses

     Accounts payable and accrued expenses as of December 31, 1999 and 1998,
consist of the following:

                                               1999                    1998
                                            ---------               ---------
    Lease rentals payable                   $  82,571               $  52,906
    Litigation settlement                        --                    40,000
    Legal fees                                 66,249                  36,508
    Machine design & configuration            128,000                    --
    Health Insurance                           12,343                    --
    Miscellaneous                              69,676                  62,127
                                            ---------               ---------
                                            $ 358,839               $ 191,541
                                            =========               =========


Note 6-Advances payable - Officers & Directors

     Advances payable represents amount payable to officers or directors of
the company in lieu of their services or for advances made to the company. In
1998, the company issued common stock against a portion of advances
outstanding. The advances payable to officers and directors are unsecured,
interest free and due on demand.

Following is a summary of Advances payable to officers and directors of the
company, as of December 31, 1999 and 1998:

Balance as on December 31, 1997                                     $ 209,488
Advances from officers and directors during 1998                      287,454
Less: Issuance of 1,277,495 common stock @$0.18 per share            (229,950)
         Repayment of advances in 1998                                (40,598)
                                                                     ---------
Balance as on December 31, 1998                                       226,394
Advances from officers and directors during 1999                      127,000
Less: Repayment of advances in 1999                                  (24,682)
                                                                     ---------
Balance as on December 31, 1999                                     $ 328,712
                                                                     =========

                                       F-14
<PAGE>


                           Utah Clay Technology, Inc.
                         (An Exploration Stage Company)
                         Notes to Financial Statements
                          December 31, 1999 and 1998

Note 7-Notes payable

     Notes payable as on December 31, 1999 and 1998 comprised of following:

<TABLE>
<CAPTION>
                                                                    1999          1998
                                                                 ---------     ---------
<S>                                                              <C>           <C>
Note payable-Bank, bearing an interest rate of 4 percent over
the prime rate (7.75% on 12/31/99 and 8.50% on 12/31/98)
and due on demand.                                               $  24,005     $  25,611
Note payable to an affiliated company, unsecured, interest
free and due on demand.                                             30,464          --
Notes payable to individuals related to officers of the
company,  bearing an interest rate of 10% per annum,
unsecured and due on demand                                         50,000          --
Notes payable to others, bearing an interest rate of 10% per
annum, unsecured and due on demand                                  20,000          --
Notes payable to others, interest free, unsecured and due on
demand                                                              25,000          --
                                                                 ---------     ---------
Total                                                            $ 149,469     $  25,611
                                                                 =========     =========
</TABLE>

Note 8- Preferred Stock

     Effective September 30, 1996, the Company authorized the following
transactions:
     ( a )  Authorization of 10,000,000 shares of preferred Stock at par
value of $ 0.001.
     ( b )  The Company issued to the following officers, directors and
shareholders in exchange for the cancellation of the debt represented by
$ 424,085 in advances, 84,817 shares of Series A Preferred Stock at $ 5.00
a share, which stock is entitled to annual dividends of $0.50 a share payable
from the earnings of the Company and cumulative if missed, is non-voting and
is preferred over the company's common Stock in the event of the liquidation
and dissolution of the Company.  The Series A Preferred Stock is neither
convertible into common Stock nor redeemable at the option of the holder
but is redeemable at the option of the company.


                        Amount of                                  Number of
                             Debt           Price /                Preferred
   Name                 Converted             Share                   Shares
-----------           -----------        -----------             -----------
Thomas F. Harrison    $   255,185          $   5.00                   51,037
Dennis S. Engh            168,900          $   5.00                   33,780
                      -----------                                -----------
Total                 $   424,085                                     84,817
                      ===========                                ===========

                                     F-15
<PAGE>


                         Utah Clay Technology, Inc.
                       (An Exploration Stage Company)
                        Notes to Financial Statements
                         December 31, 1999 and 1998


Note 9- Litigation

     Utah Clay was a defendant in a lawsuit brought for the recovery of
$ 50,000, interest and attorney fees by Six Way, Inc. and Daniel W. Jacksons
Trustee of the MJB Trust. The Company acknowledged the loan made to it by the
plaintiffs, which was the basis for the civil action. The claim was settled
for $60,000, including interest and litigation costs of $10,000, to be
payable by 1999. By December 31, 1999, the whole amount was paid off. The
outstanding liability of $40,000 as of December 31, 1998 is included in
Accounts payable and accrued expenses.

Note 10- Acquisition of mining lease

     The company acquired a mining lease of Kaolin mineral from an affiliated
company for $17,740 on December 27, 1999. The Company issued 17,739,500 shares
of common stock @$0.001 per share in lieu of consideration of mining lease.

Note 11-Going Concern uncertainty

     The company's financial statements have been presented on the basis that
it is a going concern, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The company
incurred a net loss of $2,135,581 for the period from inception (March 1,
1994) to December 31, 1999. The company's current liabilities exceeded its
current assets by $836,030 and $446,238 as of December 31, 1999 and 1998,
respectively. The company's total liabilities exceeded its total assets by
$660,473 and $416,421 as of December 31, 1999 and 1998, respectively. These
factors, as well as the uncertain conditions that the company faces in its
day-to-day operations, create an uncertainty as to the company's ability to
continue as a going concern. The financial statements do not include any
adjustments that might be necessary should the company be unable to continue
as a going concern.

     The company plans to finance the continued operations for the next year
through private funding and funding from officers of the company. In this
regard, the company raised $90,000 by issuing 260,000 shares through private
placement in the first quarter of 2000. The company has also issued an
additional 200,000 shares in March against which there is a subscription
receivable of $130,000.  The company expects to collect the subscription
receivable in the third quarter of 2000. The company has also initiated
discussions with a third party processor of its kaolin to utilize the
reserves when they are defined.



                                   F-16
<PAGE>



                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                       Notes to Financial Statements
                        December 31, 1999 and 1998


12- Subsequent events & Commitments

     Lease commitments
          Subsequent to year ended December 31, 1999, the company entered in
to five separate lease addendum agreements for mining leases on two properties
and option for mining lease on three properties, at $10,000 per year, per
property, for next five years through March, 2005. The company also is
required to pay to the Bureau of land management, US Department of interior,
an amount of $21,000 per year pursuant to their mining lease and option
agreement.

     Issuance of shares
          Subsequent to year ended December 31, 1999 the company entered in
to various agreements with several parties, whereby, the company issued
1,540,000 shares for $573,000 in consideration for cash, services and
cancellation of debt, during the quarter ended March 31, 2000.

     Stock Option
          Subsequent to year ended December 31, 1999 the company has adopted
a stock option plan, under which options granted may be "employee incentive
stock options" as defined under Section 422 of the Internal revenue code or
non-qualified stock options, as determined by the option committee of the
board of directors at the time of grant of an option.  The plan enables the
option committee of the board of directors to grant up to 500,000 stock
options to employees and consultants from time to time.  The option
committee has granted no options. The date of grant of an Option shall, for
all purposes, be the date on which the Option Committee makes the
determination granting such Option, or such other date as is determined by
the Option Committee.




                                     F-17

<PAGE>



                         Utah Clay Technology, Inc.
                       (An Exploration Stage Company)
                               BALANCE SHEETS
                  September 30, 2000 & December 31, 1999



                       ASSETS               September  30,     December 31,
                                                 2000              1999
                       ------               -------------      ------------
                                             (Unaudited)


Current Assets
     Cash                                    $      897         $       640
     Receivables                                    350                 350
     Prepaid expenses                            82,595                   -
                                             ----------         -----------
        Total Current Assets                     83,842                 990

Properties & Equipment
    Laboratory equipment                          2,484               2,484
    Machine design & configuration              128,000             128,000
    Mining Leases                                17,169              45,073
                                             ----------         -----------
        Total Properties & Equipment            147,653             175,557
                                             ----------         -----------
                                             $  231,495         $   176,547
                                             ==========         ===========

















The accompanying notes are an integral part of these financial statements.
                                      F-18
<PAGE>


                        Utah Clay Technology, Inc.
                     ( An Exploration Stage Company )
                              BALANCE SHEETS
                  September 30, 2000 & December 31, 1999



    LIABILITIES AND STOCKHOLDERS' DEFICIT      September 30,      December 31,
                                                   2000               1999
                                               ----------          ----------
                                                (Unaudited)


Current Liabilities                            $  162,944          $  358,839
     Accounts payable
     Advances payable- officers and directors     332,312             328,712
     Notes payable                                122,883             149,469
                                                ---------          ----------
        Total Current Liabilities                 618,139             837,020

Stockholders' Equity  Deficit
    Preferred stock, par value $0.001;
    10,000,000 shares authorized;
    84, 817 shares issued and outstanding              85                  85

    Common stock, par value $0.001;
    30,000,000 shares authorized; 24,961,874
     shares at September 30, 2000 and 23,331,874 at
     December 31, 1999, issued and Outstanding     24,962              23,332
    Additional paid-in capital                  2,063,004           1,451,691
    Stock subscription receivable                 (64,580)                  -
    Deficit accumulated from inception         (2,410,115)         (2,135,581)
                                               -----------         ----------
        Total Stockholders' Deficit              (386,644)           (660,473)
                                               -----------         ----------
                                               $  231,495          $  176,547
                                               ===========         ==========











The accompanying notes are an integral part of these financial statements.
                                      F-19
<PAGE>

                       Utah Clay Technology, Inc
                     (An Exploration Stage Company )
                       STATEMENTS OF OPERATIONS
                             (Unaudited)




                                         Nine months period
                                         ended September 30,
                                        2000            1999
                                   ----------------------------

Revenues                           $        -      $         -

Expenses:

Mineral lease rentals                  94,862           10,641
Inventory value adjustment

General and administrative            179,622           15,222
                                   -----------      -----------
Loss before income taxes             (274,484)         (25,863)

Income taxes                               50               50
                                   -----------      -----------
NET LOSS                           $ (274,534)     $   (25,913)
                                   ===========      ===========
Basic and diluted Loss per
     common share                  $   (0.011)     $    (0.005)
                                   ===========      ===========
Basic and diluted weighted average
    number of common shares
     outstanding                    24,491,544        5,592,374
                                   ===========      ===========








The accompanying notes are an integral part of these financial statements.

                                      F-20
<PAGE>
<TABLE>
<CAPTION>
                        Utah Clay Technology, Inc.
                     ( An Exploration Stage Company )
              STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
      From Inception (March 1, 1994) to September 30, 2000 (Unaudited)


                                                                                                   Deficit
                                                                                    Additional   accumulated
                        Preferred    Stock             Common        StocK          Paid-In         from
                           Shares    Amount            Shares        Amount         Capital       Inception       Total
                        ---------   -------          ----------    ----------      ------------  -------------  ------------
<S>                     <C>         <C>              <C>           <C>            <C>           <C>            <C>
Shares issued for
cash March 1, 1994              -   $     -           5,600,000    $  56,000      $             $              $   56,000

Shares issued for
services March 1,
1994                            -         -          14,400,000      144,000                -              -      144,000

Net loss for period
March 1, 1994 to
December 31, 1994               -         -                    -            -                -       (105,573)    (105,573)
                        ---------   -------          -----------   ----------     ------------  -------------- ------------

Balance December
31, 1994                        -         -           20,000,000      200,000                -       (105,573)      94,427

Net loss for the year
ended December 31
1995                            -         -                    -            -                -       (672,267)    (672,267)

                        ---------   -------          -----------   ----------     ------------  -------------- ------------

Balance December
31, 1995                        -         -                           200,000                -       (777,840)    (577,840)

1 for 10 reverse split
September 30, 1996                                    20,000,000     (180,000)         180,000

Change of par value
to $0.001                       -         -                    -     ( 18,000)          18,000              -            -

Preferred stock
issued to related
parties for
cancellation of debt
September 30, 1996         84,817        85                    -            -          424,000              -      424,085


Shares issued for
services in 1996                                        265,000          265           48,200              -       48,465


Net loss for the year
ended December 31
1996                            -         -                    -            -                -       (153,669)    (153,669)
                        ---------   -------          -----------   ----------     ------------  -------------- ------------

Balance December
31, 1996                   84,817   $    85            2,265,000   $    2,265     $    670,200  $    (931,509) $  (258,959)





The accompanying notes are an integral part of these financial statements.
                                      F-21
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
        STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (CONTINUED)
      From Inception (March 1, 1994) to September 30, 2000 (Unaudited)

                                                                                                   Deficit
                                                                                  Additional    accumulated
                        Preferred     Stock            Common        Stock          Paid-In         from
                          Shares      Amount           Shares        Amount         Capital       inception        Total
                        ----------  ---------        -----------   -----------    -----------   -------------  ------------
<S>                     <C>         <C>              <C>           <C>            <C>           <C>            <C>
Balance December
31, 1996                    84,817  $      85          2,265,000   $     2,265    $   670,200   $   (931,509)  $  (258,959)


Shares issued for
cash in 1997                     -          -            100,000           100        199,900              -       200,000


Shares issued for
debt cancellation
in 1997                          -          -            165,000           165           (165)             -             -


Net loss for the year
ended December
31, 1997                         -          -                  -             -              -       (378,929)     (378,929)
                        ----------  ---------        -----------   -----------    -----------   -------------  ------------

Balance December
31, 1997                    84,817         85          2,530,000         2,530        869,935     (1,310,438)     (437,888)


Shares issued for
outstanding
Warrants                         -          -            389,600           389        103,634              -       104,023


Shares issued for
debt cancellation
In 1998                          -          -          2,100,774         2,101        376,049              -       378,150


Shares issued for
services in 1998                                         572,000           572        102,073              -       102,645


Net loss for the year
ended December
31, 1998                         -          -                  -             -              -       (563,351)     (563,351)
                        ----------  ---------        -----------   -----------    -----------   -------------  ------------

Balance December
31, 1998                    84,817         85          5,592,374         5,592      1,451,691     (1,873,789)     (416,421)


Shares issued for
mining lease                     -          -         17,739,500        17,740              -              -        17,740


Net loss for the year
ended December
31, 1999                         -          -                  -             -              -       (261,792)     (261,792)
                        ----------  ---------        -----------   -----------    -----------   -------------  ------------

Balance December
31, 1999                    84,817  $      85         23,331,874   $    23,332    $ 1,451,691   $ (2,135,581)  $  (660,473)




The accompanying notes are an integral part of these financial statements.
                                      F-22
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
           STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (CONTINUED)
       From Inception (March 1, 1994) to September 30, 2000 (Unaudited)



                                                                                                  Deficit
                                                                                  Additional     accumulated
                        Preferred     Stock             Common       Stock          Paid-In         from
                          Shares      Amount            Shares       Amount         Capital       inception        Total
                        ----------  ---------        ------------  ----------     -----------   -------------  ------------
<S>                     <C>         <C>              <C>           <C>            <C>           <C>            <C>
Balance December
31, 1999                    84,817  $      85          23,331,874  $   23,332     $ 1,451,691   $ (2,135,581)  $  (660,473)


Shares issued for
cash in 2000                     -          -             260,000         260          89,740              -        90,000


Shares issued for
debt cancellation
In 2000                                                   100,000         100          24,900              -        25,000


Shares issued for
services in 2000                 -          -           1,070,000       1,070         366,873              -       367,943


Stock issued for
Subscription
receivable                       -          -             200,000         200         129,800              -       130,000


Net loss for the
Period ended
September 30, 2000               -          -                   -           -                -      (274,534)     (274,534)
                        ----------  ---------        ------------  ----------     ------------  -------------  ------------


Balance                     84,817         85          24,961,874      24,962        2,063,004    (2,410,115)     (322,064)


Stock subscription
receivable                       -          -                   -           -                -             -       (64,580)
                        ----------  ---------        ------------  ----------     ------------  ------------   ------------

Balance September
30, 2000                    84,817  $      85          24,961,874  $   24,962     $  2,063,004  $ (2,410,115)  $  (386,644)
                        ----------  ---------        ------------  ----------     ------------  -------------  ------------







The accompanying notes are an integral part of these financial statements.
                                      F-23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                         STATEMENTS OF CASH FLOWS
                              (Unaudited)



                                                                               Cumulative
                                                                               from inception
                                               Period ended      Period ended  (March 1, 1994)
                                               September 30,     September 30, to September
                                               2000              1999          30, 2000
                                               -------------     ------------- ---------------
<S>                                            <C>               <C>           <C>
Cash flows from operating activities:
Net loss                                       $   (274,534)     $    (25,913) $   (2,410,115)
Adjustments to reconcile net loss to net cash
   used in operating activities:
   Issuance of common stock for services            367,943            17,740         663,053
   (Increase) in prepaid expenses                   (82,595)                          (82,595)
   (Increase) in receivables & other current
    assets                                                -           (21,568)           (350)
   Increase (decrease) in accounts payable         (170,895)           (1,975)        336,144
                                               -------------     ------------- ---------------
   Net cash used in operating activities           (160,081)          (31,716)     (1,493,863)




Cash flows from investing activities:
   Mining leases                                     27,904                 -             571
   Machine design & configuration                         -           (54,789)       (130,484)
                                               ------------      ------------- ---------------
   Net cash provided by (used in) investing
   Activities                                        27,904           (54,789)       (129,913)



Cash flows from financing activities:

   Net proceeds from advances by
   officers/directors                                 3,600            59,935         986,347
   Proceeds from (payments of) notes payable        (26,586)           27,071         122,883
   Proceeds from issuance of shares                 155,420                 -         515,443
                                               -------------     ------------  --------------
   Net cash provided by financing activities:       132,434            87,006       1,624,673



Net increase in cash & cash equivalent                  257               501             897
Cash & cash equivalent - beginning of period            640               208               -
                                               ------------      ------------  --------------

Cash at end of period                          $        897      $        709  $          897
                                               ------------      ------------  --------------



The accompanying notes are an integral part of these financial statements.
                                      F-24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                   STATEMENTS OF CASH FLOWS (CONTINUED)
                              (Unaudited)


                                                                               Cumulative
                                                                               from inception
                                               Period ended      Period ended  (March 1, 1994)
                                               September 30,     September 30, to September
                                               2000              1999          30, 2000
                                               -------------     ------------- ---------------
<S>                                            <C>               <C>           <C>
Supplemental disclosures:

Cash paid during the period for:               $           -     $           - $       6,951
                                               =============     ============= =============

  Income tax                                   $           -     $           - $         850
                                               =============     ============= =============

Non-cash investing and financing activities:

  Issuance of common stock for services        $     367,943     $           - $     663,053
                                               =============     ============= =============
  Issuance of preferred stock for debt         $           -     $           - $     424,085
                                               =============     ============= =============
  Issuance of common stock for acquisition
   of Mining rights                            $           -     $           - $      17,740
                                               =============     ============= =============
  Issuance of common stock against
   Cancellation of debt - Prepaid, Advances
   and accrued expenses                        $      25,000     $           - $     827,235
                                               =============     ============= =============

  Subscription receivable                      $     130,000     $           - $     130,000
                                               =============     ============= =============











The accompanying notes are an integral part of these financial statements.
                                      F-25
</TABLE>
<PAGE>




                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                 Notes to Unaudited Financial Statements
                 September 30, 2000 and 1999 (Unaudited)


Note 1- Summary of significant accounting policies

Organization and nature of operations

            Utah Clay Technology, Inc. (the "Company"), a Utah corporation, was
incorporated on March 1, 1994.  The planned operations of the Company are to
engage in mining, processing and marketing of minerals.  For the period from
inception (March 1, 1994) to September 30, 2000 the Company had no revenues.
The Company is classified as An Exploration stage company because its principal
activities involve obtaining the capital necessary to execute its strategic
business plan.

Cash and cash equivalents

            The Company considers all liquid investments with a maturity of
three months or less from the date of purchase that are readily convertible
into cash to be cash equivalents.

Issuance of share for services

            Valuation of shares for services is based on the fair market value
 of services.

Use of estimates

            The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Equipment and mining properties

            Equipment is recorded at cost.  The Company has adopted the
straight-line method in computing depreciation for financial reporting purposes
and generally uses accelerated methods for income tax purposes.  The annual
provision for depreciation will be computed principally in accordance with the
following ranges of asset lives: laboratory equipment- 3 to 5 years; processing
equipment- 3 to 10 years.  Equipment was acquired and set up in late, 1997.  No
depreciation expense has been recorded in the financial statements as the
company is yet to use any of its equipment and mining properties.


                                      F-26
<PAGE>


                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                 Notes to Unaudited Financial Statements
                 September 30, 2000 and 1999 (Unaudited)

Reclassifications

            Certain items in the prior year financial statements have been
reclassified for comparative purposes to conform with the presentation in the
current period's presentation. These reclassifications have no effect on the
previously reported income (loss).

Income taxes

            Deferred income tax assets and liabilities are computed annually
for differences between the financial statements and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted laws and rates applicable to the periods in which the
differences are expected to affect taxable income (loss). Valuation allowance
is established when necessary to reduce deferred tax assets to the amount
expected to be realized.

Basic and diluted net loss per share

            Net loss per share is calculated in accordance with the Statement
of financial accounting standards No. 128 (SFAS No. 128), "Earnings per share".
SFAS No. 128 superseded Accounting  Principles Board Opinion No.15 (APB 15).
Net loss per share for all periods presented has been restated to reflect the
adoption of SFAS No. 128. Basic net loss per share is based upon the weighted
average number of common shares outstanding. Diluted net loss per share is
based on the assumption that all dilutive convertible shares and stock options
were converted or exercised. Dilution is computed by applying the treasury
stock method. Under this method, options and warrants are assumed to be
exercised at the beginning of the period (or at the time of issuance, if
later), and as if funds obtained thereby were used to purchase common stock at
the average market price during the period.

Stock-based compensation

            In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation". SFAS No. 123 prescribes accounting and reporting
standards for all stock-based compensation plans, including employee stock
options, restricted stock, employee stock purchase plans and stock appreciation
rights. SFAS No. 123 requires compensation expense to be recorded (i) using the
new fair value method or (ii) using the existing accounting rules prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for stock issued to
employees" (APB 25) and related interpretations with proforma disclosure of
what net income and earnings per share would have been had the company adopted
the new fair value method. The company adopted this standard in 1998 and the
implementation of this standard did not have any impact on its financial
statements.

                                     F-27
<PAGE>



                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                 Notes to Unaudited Financial Statements
                 September 30, 2000 and 1999 (Unaudited)

Fair value of financial instruments

            Statement of financial accounting standard No. 107, Disclosures
about fair value of financial instruments, requires that the company disclose
estimated fair values of financial instruments. The carrying amounts reported
in the statements of  financial position for current assets and current
liabilities qualifying as financial instruments are a reasonable estimate of
fair value.

Comprehensive income

            Statement of financial accounting standards No. 130, Reporting
comprehensive income (SFAS No. 130), establishes standards for reporting and
display of comprehensive income, its components and accumulated balances.
Comprehensive income is defined to include all changes in equity, except those
 resulting resulting from investments by owners and distributions to owners.
Among other disclosures, SFAS No. 130 requires that all items that are required
to be recognized under current accounting standards as components of
comprehensive income be reported in a financial statements that is displayed
with the same prominence as other financial statements. The company adopted
this standard in 1998 and the implementation of this standard did not have a
material impact on its financial statements.

Reporting segments

            Statement of financial accounting standards No. 131, Disclosures
about segments of an enterprise and related information (SFAS No. 131), which
superceded statement of financial accounting standards No. 14, Financial
reporting for segments of a business enterprise, establishes standards for
the way that public enterprises report information about operating segments
in annual financial statements and requires reporting of selected information
about operating segments in interim financial statements regarding products
and services, geographic areas and major customers. SFAS No. 131 defines
operating segments as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in
assessing performances. The company adopted this standard in 1998 and the
implementation of this standard did not have a material impact on its
financial statements.

Pension and other benefits

            In February 1998, the Financing accounting standards board issued
statement of financial accounting standards No. 132, Employers' disclosures
about pension and other post-retirement benefits (SFAS No. 132), which
standardizes the disclosures requirements for pension and other post-retirement
benefits. The company adopted this standard in 1998 and the implementation
of this standard did not have any impact on its financial statements.

                                     F-28

<PAGE>

                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                 Notes to Unaudited Financial Statements
                 September 30, 2000 and 1999 (Unaudited)

Accounting for the costs of computer software developed or obtained for
internal use

            In March 1998, the Accounting standards executive committee of
the American institute of certified public accountants (ASEC of AICPA) issued
Statement of position (SOP) No. 98-1, "Accounting for the costs of computer
software developed or obtained for internal use", effective for fiscal years
beginning after December 15, 1998. SOP N0. 98-1 requires that certain costs of
computer software developed or obtained for internal use be continued
capitalized and amortized over the useful life of the related software. The
company adopted this standard in fiscal 1999 and the implementation of this
standard did not have a material impact on its financial statements.

Costs of start-up activities

            In April 1998, the ASEC of AICPA issued SOP No. 98-5, "Reporting
on the costs of start-up activities", effective for fiscal years beginning
after December 15, 1998. SOP 98-5 requires the costs of start-up activities
and organization costs to be expensed as incurred. The company adopted this
standard in fiscal 1999 and the implementation of this standard did not have
a material impact on its financial statements.

Accounting developments

            In June 1998, the FASB issued SFAS No. 133, "Accounting for
derivative instruments and hedging activities", effective for fiscal years
beginning after June 15, 1999, which has deferred to June 30, 2000 by
publishing of SFAS No. 137. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for
hedging activities. This statement requires that an entity recognize all
derivative as either assets or liabilities in the statement of financial
condition and measure those instruments at fair value. The accounting for
changes in the fair value of a derivative instrument depends on its intended
use and the resulting designation. The company does not expect that the
adoption of this standard will have a material impact on its financial
statements.

Note 2-  Income taxes

            Since the Company has not generated taxable income since inception,
no provision for income taxes has been provided (other than minimum franchise
taxes paid to the State of Utah).

Note 3-  An exploration stage company

            An exploration stage company is one for which principal operations
of mining have not commenced or principal operations have generated an
insignificant amount of revenue.  Management of an exploration stage company
devotes most of its activities in

                                     F-29

<PAGE>
                        Utah Clay Technology, Inc.
                      (An Exploration Stage Company)
                 Notes to Unaudited Financial Statements
                 September 30, 2000 and 1999 (Unaudited)

conducting exploratory mining operations. Operating losses have been incurred
through March 31, 2000, and the Company continues to use, rather than provide,
working capital in this operation.  Although management believes that it is
pursuing a course of action that will provide successful future operations, the
outcome of these matters is uncertain.

Note 4-Going Concern uncertainty

            The company's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The company
incurred a net loss of $2,410,115 for the period from inception (March 1, 1994)
to September 30, 2000. The company's current liabilities exceeded its current
assets by $534,297 and $836,030 as of September 30, 2000 and December 31, 1999,
respectively. These factors, as well as the uncertain conditions that the
company faces in its day-to-day operations, create an uncertainty as to the
company's ability to continue as a going concern. The financial statements do
not include any adjustments that might be necessary should the company be
unable to continue as a going concern.

            The company plans to finance the continued operations for the next
year through private funding and funding from officers of the company. In this
regard, the company raised $90,000 by issuing 260,000 shares through private
placement in the first quarter of 2000. The company has also issued an
additional 200,000 shares in March against which the Company raised $65,420 and
there is a subscription receivable of $64,580 as of September 30, 2000.  The
company expects to collect the subscription receivable in the fourth quarter
of 2000. The company has also initiated discussions with a third party
processor of its kaolin to utilize the reserves when they are defined.

Note-5 Basis of preparation

            The accompanying unaudited condensed interim financial statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission for the presentation of interim financial
information, but do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements.
The audited financial statements for the two years ended December 31, 1999 was
filed on April 7, 2000 with the Securities and Exchange Commission and is
hereby referenced. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. Operating results for
the nine-month period ended September 30, 2000 are not necessarily indicative
of the results that may be expected for the year ended December 31, 2000.

                                      F-30

<PAGE>

PROSPECTUS DELIVERY OBLIGATION.  Until April 17, 2001 (90 days after the
effective date of this Prospectus), all dealers effecting transactions in
these securities may be required to deliver a Prospectus.  Further, all
dealers or brokers that effect transactions in these securities for the selling
security holders are required to deliver a Prospectus.

                                       34

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